SmartCrowd wants to help you invest in real estate properties in the United Arab Emirates for mouthwatering returns.
The company has designed a proprietary investment scheme that helps small real estate investors pull funds together towards owning cash-bearing real estate properties in Dubai with as low as 500 AED (60k Naira).
In this article, we’ll look at what the company is proposing for its international investors and if it’s worth your money.
What Is SmartCrowd All About?
SmartCrowd is recognized as MENA’s first and largest real estate crowdfunding platform.
They have a goal to get small investors to play in the lucrative UAE real estate market without committing too much funds or using debt instruments.
With SmartCrowd, you could find an attractive real estate investment opportunity in the UAE and pool funds with others to invest with as low as AED 500.
The real estate properties are then rented out to yield monthly cash Flow for investors, and profit is shared according to each investor stake.
How Does SmartCrowd Make Money?
The company makes money by providing allied services that are integral to the real estate investment process.
They help find prime real estate properties in the Emirates, tie up the deal into segregated structures, and manage the properties on behalf of investors looking to invest passively.
The company charges a percentage of each investment deal for specific fees in different stages of the investment cycle such as:
- Entry Fee: 1.5%
- Annual administration fee: 0.5%
- Exit fee: 2.5%
How to Invest in SmartCrowd
To start investing in SmartCrowd, you first have to download their mobile app, register and verify your profile.
You’ll then need to create or join a Special Purpose Vehicle (SPV) to start investing in real estate properties of your choice.
An SPV is like a legal entity that binds investors within a group and dictates the terms of their associated investment activity.
How Much ROI Does SmartCrowd Offer?
SmartCrowd does not offer any specific ROI.
The goal is typically to generate cash flow for investors through rental fees collected from the invested properties.
Hence, returns would depend on the foregoing rental rates within the area where a property is located.
Investors will get periodic returns based on their stake within the SPV they’re investing with.
Is SmartCrowd Legit or Scam?
The company looks legit.
Firstly, they have raised over $3 million from global investors such as 500 Startups and Amaana Capital.
This at least lends some credibility to SmartCrowd that they will be accountable to investors in the short term.
What I Dislike About SmartCrowd
It will be very difficult to dislike anything about a company trying to democratize real estate investing in the UAE.
However, if I’ll be very critical of the company, I’d say that the fees look and feel just too much, especially from the angle of the average investor.
I’d prefer if the fees are summarized into one reasonable payment at the entry point, with no fees required when you exit the investment.
What I Like About SmartCrowd
It’s a really lucrative space for any investor looking to put money in a safe haven with guaranteed cash flow.
I also like the fact that the barrier to entry is quite low by real estate standards.
With just 500 AED, which is about 60k Naira, you join the platform and start investing in prime real estate properties in Dubai.
Can You Lose Money With SmartCrowd?
I would have loved to say no.
However, the nature of real estate investment guarantees that rental prices could always fluctuate.
If the real estate market deflates in an area where you’ve invested, then you could be counting some losses.
But if I’m honest, it’s less likely to happen. And you’d be getting some cash flow at the least.
Should You Invest in SmartCrowd?
The question is, why not?
With a medium-risk rating, SmartCrowd is a good opportunity for investors looking to venture into new portfolios for better returns.
This could just be the next real estate cash cow for investors seeking funds to retire on a beach.
I’d say, go for it.