Real Estate Investor Magazine South Africa July 2015 | Page 21

investors to acquire buy-to-let
property, usually in a Special
Purpose Vehicle (SPV) that
is a limited liability company.
Investors then own a share in the
SPV company, which tenants
and manages the property
professionally, and investors then
share in the rental returns and
sometimes the appreciation.
This allows buy-to-let investors
to diversify their risk by investing
smaller amounts into different
types of properties and across
geographical areas. Furthermore,
unlike an investment in, for
example, a REIT, investors are
investing in a specific property –
not a pool of properties, which
increases transparency and control,
and saves on fees. And because most
real estate crowdfunding platforms
offer investors the functionality to
monitor their investments online,
investing in real estate becomes
as easy as investing in stocks in
publicly traded companies.
Crowdfunding can certainly
add an interesting dimension to
a diversified portfolio, especially
for
sophisticated
investors.
Nevertheless,
crowdfunding
investments should be approached
with the same diligence and
intelligence as any sophisticated
investo