Frequently asked questions

What is marketplace lending?

Marketplace lending (also known as peer-to-peer (P2P) lending) allows a person to lend money to another person or company as an alternative to financing through the more traditional big banks.

How long has CrowdProperty been operating?

CrowdProperty has been operating in the UK since 2014. We launched in Australia in May 2021.

How does CrowdProperty make money?

CrowdProperty is paid by the borrower for financing their projects — an initial fee and then interest on the amount they are loaned through the platform for each project, when it is completed.

Why am I not receiving your emails?

Please check your junk mail or spam folder as this email can sometimes be sent there. If you are still experiencing problems, please email us at hello@crowdproperty.com.au

What information do I need to provide?

To register an investor account, we will need: your full name, email address, date of birth, mobile number, proof of identity, and proof of address (alongside other corporate details if investing through your company).

How do I withdraw funds from my standard account?

If you have funds deposited in your Standard account, you can withdraw them on request. Fill in the ‘bank details’ section of your profile with the account which you would like them to be returned to, and then click the ‘withdraw’ button. This will take 1-5 working days.

How long will it take for funds to be returned to me after I have requested a withdrawal?

Once you have requested withdrawal you can then expect funds to be returned to you within 1-5 working days.

Are there any fees involved with setting up an investing account?

No. Setting up a CrowdProperty account is free.

Why do you need Anti-Money Laundering (AML) and Know Your Customer (KYC) checks?

As an authorised business, it is necessary that we perform certain Anti-Money Laundering and Know Your Customer checks to verify your identity and prevent money laundering. For this reason, we ask every investor to upload a proof of identity (we can accept a valid passport or driving licence) and a proof of address (we can accept a utility bill or bank statement). We are partnered with a third-party provider who performs electronic checks against certain watchlists also. For this reason, investors can only pledge and open an account once these checks have been passed.

How do I choose which account I would like to pledge from: individual, company, trust or SMSF?

When pledging (view ‘how do I pledge towards a project’ for further information), specify the amount that you would like to pledge. Beneath this field, you must actively select which account you would like the pledge to come from. You will have the option of either Individual (Standard), Company, Trust or SMSF, depending on which accounts you have set up.

How do I reset my password?

To reset your password, log in to your investor account and view the ‘personal details’ page. Scroll down to the ‘account preferences’ section, and where it says ‘password,’ enter your new password and confirm this in the confirmation box. Save this information and your password will reset.

If you have forgotten your password, go to the login page and click ‘forgot password’. You will get a password reset link in your inbox.

Can I transfer funds from a joint account?

You can transfer funds towards a project from a joint bank account. We will require proof of identity and proof of address for every named account holder. The transfer must come from an account associated with the name of the investor.

Do I need to be an experienced investor/developer to obtain a loan through CrowdProperty?

Experience and knowledge are invaluable in the property market. At CrowdProperty, we focus on the potential of every project. This is why our team of experts appraise projects to determine the creditworthiness and ability to repay. Thus, we prefer to work with projects that have experienced teams undertaking them. But we assess every project on its collective merits.

What factors do you consider when deciding whether or not a development should be listed on the CrowdProperty platform?

As a duty of care to protect our investors, we ensure that all projects comply with ASIC regulations. We require all our projects to have planning permission. We assess projects based on key performance factors such as the profit on cost, loan to gross realisation value (GRV), loan to value, and loan to total development cost (TDC). We also assess the experience of the developer and the wider team working with the developer.

What sort of projects does CrowdProperty finance?

CrowdProeprty works with small-scale residential property developers. We help finance new build, self-build residential developments, commercial to residential conversion, co-living development, serviced accommodation conversion, extension and renovation, strata titling, bridging purchases, auction purchases (amongst others).

Does CrowdProperty do investment property mortgages?

No, CrowdProperty does not offer Investment mortgages. This is because this type of property finance is cheapest from mainstream banks and we recommend that route for anyone seeking conventional finance.

How long are the loans for?

Loan terms are up to 24 months.

Is there a limit on how much a developer can borrow through CrowdProperty?

We currently have a range of lending from $1m to $25m.

How much interest do you charge?

We charge from 9% per annum interest rate and one simple success fee up to 3% which is charged on successful fund raising. Costs will vary depending on project type and risk. All other third-party expenses are required to be paid by the borrower at cost  (see ‘What are the costs associated with these loans?’ for a typical breakdown of additional costs).  Do assess any offer for finance very carefully – they are often very complicated.

What other fees do you charge?

We pride ourselves on having no hidden fees. You pay an interest rates for your loan, and a success fee for establishing the loan (up to 3%). That’s it. No line fees, no exit fees, no early exit fees (we celebrate when you finish a project early!). You do pay for all third-party costs (at cost) — things like valuations, quantity surveying, legals, etc.

What are the costs associated with these loans?

Other than the interest rate and success fee, all other costs are ‘at cost’  i.e. we don’t seek to profit from them!

As a rough guide, the initial financier’s report is typically between $2,000 & $4,000 plus GST depending on the size of the project; QS reports required for drawdown payments are typically around $1000 plus GST (the number required depends on the drawdown structure); and legals will be around 0.5% of loan amount, typically around $8000 plus GST. Finally on exit, a charge is levied by the Land Titles office to redeem the first mortgage, which is paid directly to the appropriate state Titles office at cost, typically around $500 plus GST. If a specialist project requires a separate Trust or Special Purpose Vehicle then the developer should factor in any set up or wind up costs which would be a project expense.

Can I repay the loan early?

Yes, you can repay your loan early. If the loan is repaid between 6 months and 24 months (maximum loan term), then you will not be charged for early repayment.

What happens if I can’t repay the loan?

CrowdProperty has first mortgage security over the property and therefore has the right to repossess. This measure will only be used as a last resort and we will work with you to find acceptable repayment methods. If you show no signs of reasonably being able to repay the loan then your property could be at risk of repossession.

What security will I need to offer you?

There are no equity shares. We take first mortgage security on all our projects to protect both our borrowers and investors.

Do investors get any equity or share of profits from projects?

No, investors do not get any equity or share directly in the profit from your project. CrowdProperty is a marketplace lending business that deals exclusively with senior, secured debt. Every pledge will be a loan towards the project as specified for the developer, and returns will be in the form of interest on the capital loaned.

Do I need a solicitor?

CrowdProperty has a solicitor which represents us and all investors, who we act on behalf of. Therefore, you do not need to employ a solicitor.

Can I use my own solicitor?

Yes, you can use your own solicitor. However we suggest that you work with a solicitor with a good track record of conveyancing.

How is CrowdProperty different from other marketplace lending platforms?

What differentiates us from other lending platforms is our expertise and responsiveness. We place huge importance on providing a quick, simple and transparent service to property professionals to give you more time to focus on growing your property business rather than marshalling finance. It’s property finance by property people!

What does my investor portfolio show?

Your investor portfolio shows total funds available, total funds employed in active loans, the total amount that you have lent and the amount of interest you have earned from the specific investing accounts you have created. You will also see deposit information on your portfolio – your ‘wallet’; these are the bank details you must transfer funds to for investment. It will also show a breakdown of individual projects you have pledged towards: your pledge amount, loan start and end date, and expected (or earned) interest.

How long will it take for funds to clear in my standard account?

The time depends on your bank. We suggest you allow a couple of working days for funds to transfer into your standard account. However,  if your bank has enabled the New Payments Platform (NPP), such as Osko, then this transfer could happen straight away.

What is a CrowdProperty standard loan account?

The CrowdProperty standard loan account is your central CrowdProperty account, which you open when you register to become a investor. You are not obliged to pledge from this account, and it is completely free to open. If you pledge via your CrowdProperty standard loan account, you may have to pay tax on interest repaid throughout the tax year. Once you have your standard loan account you can then open any of our other types of account – such as CrowdProperty SMSF account. It is then your choice which of your accounts you choose to pledge from.

How do I set up an SMSF investing account with CrowdProperty?

For details as to how to set up a self-managed super fund account, please refer to our SMSF page.

I’ve pledged to a project from my Self Managed Super Fund, how do I transfer money to my SMSF investing account?

Once you’ve pledged to a project from your SMSF account, you can either:

A. Deposit funds in your SMSF account immediately. You can do this by viewing the deposit information on your SMSF portfolio. Your portfolio will show you the account number, BSB and reference you must transfer to. Please note, whilst this money is not actively employed in a project you have pledged towards, you will not earn any interest. Once all funds are ready to be transferred, we will then move the funds to fulfil your pledge across from your lending wallet to the project. We will send you a message via your investor inbox to notify you this has been done.

B. Deposit funds in your SMSF account once we have requested them. Approximately 1-8 weeks post project launch, we will send a message to your investor inbox requesting you to transfer funds by a specific date. The necessary account number, BSB, reference and amount will be detailed in this message. These funds, once deposited in your wallet, will move almost instantaneously across to the project.

How much do you charge borrowers?

The standard borrower rate is around 9-12% per annum interest. This is set and regularly reviewed to be competitive with traditional property project finance providers. As our rates are competitive with other non-bank lenders , we attract applications from quality projects, so rather than offering finance to property professionals that are not able to raise finance elsewhere, we compete for the best projects and take share in particular from banks by understanding and serving those property professionals’ needs best.

Why is there a difference between the borrower and investor rate?

As is standard in marketplace lending, there is a difference between the rate paid by the borrower and the rate paid to investors. This is a servicing fee paid for by the borrower through the course of the loan. This borrower fee does not have any implications for investors’ personal tax positions. Personal tax liabilities for investors, if applicable, will be based on the target income return rate specified. As with investor cashflows, CrowdProperty receives this cash at the end of the loan when it is paid. In the unlikely event that the platform winds-down, this structure works well as this end-of-loan cashflow is ample to cover the costs of managing outstanding loans through to ensure repayment of capital and interest owed to investors.

Why are we different to other property marketplace lending platforms?

CrowdProperty is different to other platforms in a number of important ways. Specifically, we:

1. Always take the first mortgage security, the highest level of security on a property.
2. Only ever lend on projects with planning permission already in place.
3. Are founded with unparalleled, hands-on expertise at the heart of the business, meaning projects are assessed with deep, specialist property experience.
4. Originate projects directly, meaning more efficient economics and the building of long-term, trusted and loyal developer relationships.
5. Attract the best projects with competitive interest rates, taking market share from banks by knowing what property professionals need (not funding projects unable to raise elsewhere).
6. We are an independent marketplace, only ever funding third party projects with structured project appraisal and approval governance processes.
7. Are singularly focused since the foundation on excellence as a property development lender, forever building stronger and deeper expertise.
8. Offer utmost transparency on the project, the borrowing entity and the people involved in the project.
9. Continue to have a 100% track record in repaying investors’ capital and interest.

What am I investing in / who am I investing with?

You are investing in loans provided to carefully selected property projects run by professionals. We require that either the borrower and their team, have a proven track record of experience.

Is there a minimum or maximum investment size?

The minimum investment amount per loan is $25,000. We currently do not have a maximum investment size.

How long is the investment term?

Loan terms can be anywhere from 3-24 months and vary depending on the project you pledge towards. The average loan term is around 14 months.

When do I start earning interest?

As soon as your money arrives in the account (after we have requested you send it), it will begin earning interest.

Do I have shares (equity) in the projects I loan to?

No. As CrowdProperty is a marketplace lending business we deal exclusively with debt. Every pledge will be a loan towards the project as specified for the developer, and returns will be in the form of interest on the capital loaned.

Can I access my money early if necessary?

No. When you invest money through your CrowdProperty account, you commit to investing that money for the term of said investment. During this time, it is not possible to withdraw the original investment amount.

How often is interest paid to me?

Interest is paid at the end of the loan term.

When do I get my capital and interest back?

You will get your capital and interest back at the end of the loan term, when the borrower has repaid the loan. This enables the borrower to have the cash flow to complete the project.

If the borrower part repays early, you will receive a calculated partial repayment of your original pledge amount.

Where are my capital and interest returned to at the end of a loan?

At the end of the loan term, funds invested via the CrowdProperty account will be paid back to your nominated account with interest. You then have the option to reinvest the funds.

Please note, funds must be returned to a bank account associated with the name of the investor. SMSF funds must be returned to the SMSF cash management account from which they came.

What happens if the borrower pays money back late?

Although there is an agreed loan term with the borrower, we cannot guarantee that they will not be late in repaying the loan. In this instance, interest rates for investors increase to 9% p.a. for each day over the loan agreement period.

What happens if a borrower defaults on a loan?

If a borrower defaults on the loan, CrowdProperty has first legal charge over the property and therefore seizes ownership. This is the same level of security that a mortgage company has.

Once CrowdProperty has taken ownership of the property and project, our in-house experts will analyse the best course of action to follow to recover investors’ capital and interest. We will consider market conditions, the status of the project and the current level of debt.

There’s no project live, what do I do?

If there are no projects live and available to invest in, don’t worry. We are constantly working hard to ensure we have a strong pipeline of projects available to investors. Ensure you are registered as a investor to receive email updates to be informed of upcoming projects. Once a project is ready to launch, we will email you with details and launch dates and times.

How do I choose which projects to invest in?

Project information is released before launch, often including a Q&A webinar where investors can hear from the borrower and understand project specifics in further detail to help you make investment decisions. This gives you time and information to make a decision as to whether you would like to invest in this specific project.

What is a pledge?

A pledge is an amount of money an investor chooses to commit to invest in a project. A pledge is not when you transfer funds, just when you commit to transferring funds.

How do I pledge towards a project?

On a project launch day, ensure you are logged into your account. Live and funding projects appear at the top of the ‘projects’ page.

Click the ‘pledge towards this project’ button, specify the amount you would like to pledge.

Once your pledge has been made successfully, you will receive an email confirmation, and it will immediately show in your account.

How many projects can I pledge towards?

You can pledge towards as many projects as you choose.

I’ve pledged to a project; how do I deposit money to fulfil my pledge?

Approximately 1-8 weeks post project launch, we will send an email to you requesting you to transfer funds by a specific date.

The necessary account number, sort code, reference and amount will be detailed in this message. The account you send money to is held by an ASIC approved third party and transferred to the borrower from there. At no point does CrowdProperty hold any of your money; we just manage the process.

Where can I find the loan agreement?

You can find the loan agreement on your loan portfolio. Click the view pledge button next to the relevant investment and find attached the loan agreement.

What is first mortgage security?

In the event of a loan default, a first mortgage secured loan will have priority if the property is sold to repay investors’ capital and interest. CrowdProperty only offers first mortgage secured loans. Read more about first mortgage and the capital stack here.

How does CrowdProperty secure my funds?

CrowdProperty undertakes numerous measures to secure your funds. First and foremost, we have first mortgage security on every project, meaning that, if the borrower were to default, we have ownership of the property and project. This is an essential, non-negotiable criterion. This means that, should a borrower default, CrowdProperty has ownership of the project and can determine the best way to complete the project to ensure investors’ capital and interest are returned. Furthermore, our in-house specialist property team assesses every project with our 57-step due diligence process. Only applications with certain loan-to-value, loan-to-cost, and profit-on-cost percentages will be considered. Our due diligence process is so rigorous that we only finance approximately 4% of project applications received.

Is my money protected by the Australian Government Guarantee Scheme?

Marketplace lending is not covered by the Australian Government Guarantee Scheme and therefore, CrowdProperty is not.

How can my funds be secured, but also my capital be at risk?

When you invest with CrowdProperty, your funds are secured against an asset – the property. This means that your returns will never be less than the value of the asset itself. However, the reason your capital is at risk (as it is with any investment) is that we cannot guarantee market conditions will be positive, and we cannot assure that the borrower will not get into significant difficulty with their project.

What would happen if the CrowdProperty platform were to fail?

The Australian Government Guarantee Scheme does not cover the insolvency of marketplace lending platforms. Marketplace lending companies, like CrowdProperty, which are regulated by ASIC, are required to protect investors’ money in several ways if the platform were to fail:

Investor funds that have not been lent to borrowers are held separately in trust by a third party custodian, Quay Fund Services (our Trustee). These trusts are completely separate from CrowdProperty’s own money, and we cannot use client money for our own business purposes. These funds are held by the trustee and do not form part of our assets, which means that they would not be available to creditors in the event of our insolvency. 

The role of the trustee is to safeguard our investors’ assets. This means that in the unlikely event that CrowdProperty ceases to trade, the Trustee would take our place in administering existing loan contracts between investors and borrowers. In practice, this means that if a platform does fail, all investors’ existing loans would be unaffected.

The first legal charge that we take out on all property projects on our investors’ behalf would still stand if CrowdProperty became insolvent. This would continue to safeguard investors’ money and keep it secured against the asset, so that if a project developer were to default on repayments, the back-up service provider would operate on our investors’ behalf and take over the project to attempt to pay back investors’ capital and interest.