Crowdfunding Platforms: Smartcrowd vs Getstake vs Baytukum
If you thought the Dubai property market was out of reach, crowdfunding platforms like Smartcrowd and Getstake offer everyday investors the flexibility to get into property investing with as little as AED 500. They buy the property on your behalf and there is no hassle of applying for mortgages.
Curious about what they can offer?
In this comprehensive breakdown, we’ll delve into the intricacies of how these platforms operate, shedding light on their ratings, fees and their investment strategies. It could be your ticket to getting into property investment.
First, What are Real Estate Crowdfunding Platforms?
Alright, investing in real estate through crowdfunding platforms is like a group effort to invest in properties without needing a lot of cash upfront.
Instead of having to come up with a huge down payment to buy a property on your own, these crowdfunding platforms let you pool your money with other investors.
You can contribute as little as a few hundred Dirhams and still own a piece of property in Dubai. It’s a way more accessible entry point compared to the traditional real estate investment.
And unlike REITs, which offer shares in a company that owns real estate, crowdfunding lets investors put money directly into specific properties.
Just remember, like any investment, it comes with its own set of pros and cons:
Pros
1. Accessibility: Real estate crowdfunding makes it easier for everyday investors to get into the property market, with a smaller amount of capital and without the need for getting mortgages.
2. Diversification: You can spread your real estate funds across multiple projects or locations, reducing the risk of a single investment underperforming.
3. Transparency: Most platforms provide detailed insights into projects, developers, and expected returns.
4. High Potential Returns: Real estate investments can have good ROI through rental income and property appreciation.
5. Passive Income: Many property crowdfunding deals offer passive income potential, especially if you are into rental properties.
6. Professional Management: No need to roll up your sleeves and play landlord. The properties are typically managed by experienced professionals, reducing the burden of property management for investors.
Cons
1. Illiquidity: Investments have longer lock-in periods, and withdrawing early will result in fees. Selling a share in a crowdfunded property may take time, making it difficult to quickly access funds.
2. Risk of Loss: Like any investment, there’s the risk of losing money. Not every deal is a gold mine, and specific projects may fail to meet expectations.
3. Limited Control: You are on the backseat when it comes to crowdfunded properties. Investors usually have little to no say in the day-to-day management of the property.
4. Dependence on Platform Integrity: The success of an investment can depend heavily on the crowdfunding platform’s reliability and management expertise. Unreliable platforms could lead to mismanagement or potential loss of funds.
5. Fees: Crowdfunding platforms do charge fees, which can eat into your overall returns.
6. Dilution Risk: Your investment pie might get sliced thinner if the project needs more cash down the line.
Getstake vs Smartcrowd vs Baytukum
In Dubai, Smartcrowd, Getstake and Baytukum are three crowdfunding platforms that make it easier to dip your toes into the property market.
They offer ways to invest without buying the entire properties, but they do it in different ways.
Let’s take a closer look at what each platform brings to the table.
Smartcrowd vs Getstake vs Baytukum – Which One Is Better?
When comparing the platforms, it’s important to understand that these crowdfunding platforms offer vetted opportunities for property investments, but they operate with different models and may cater to different types of investors.
| Crowdfunding Platform | Ratings & Reviews* | Min. Investment | Holding Period | Fees | Exit |
| Smartcrowd | Google 4.7 (279 Reviews) Trustpilot 4.4 (213 Reviews) | AED 500 Max. Investment (AED 183,625 / USD 50,000) | 5 Years Recommended Have the option to exit earlier through Share Transfer *Share Transfer is open for 2 weeks, twice a year, after 1-year lock-in period. | Entry Fee: 1.5% at time of investment Annual Administration Fee: 0.5% / year Exit Fee: 2.5% at time of sale | Voting occurs automatically at 5 years, or prior to this if the property receives a good offer. The vote is based on the proportionate weighting of your investment. That means, if you own 10%, your vote carries a 10% weight. Max anyone to own is 24.99% of a property. |
| GetStake | Google 4.2 (84 Reviews) Trustpilot 4.6 (391 Reviews) | AED 2000 Max.Investment (AED 183,625 / USD 50,000) | 5+ Years Have the option to exit earlier through ‘Exit Window’ *Exit windows are open for 2 weeks, twice a year, after 1-year lock-in period. | Acquisition Fee: 1.5% at time of investment Annual Administration Fee: 0.5% / year Initial KYC and AML Fee: 0.2% at time of investment Annual KYC and AML Fee: 0.1% from second year onwards Exit Fee: 2.5% at time of sale Performance Fee: 7% on appreciation profits | End of Investment Term, you and all investors can vote to sell or hold for another 12 months. If Property’s ROI reaches in excess of 30%, Stake will initiate a voting process on whether or not to sell the Property. If majority decision to sell the Property is reached, Stake will to initiate the sale of the Property on behalf of the PC. |
| Baytukum | Google 5.0 (16 Reviews) | AED 5000 Max.Investment (AED 183,625 / USD 50,000) | 3-5 Years Have the option to exit earlier through Share Transfer | Acquisition Fee: 2.98% at time of investment Exit Fee: 2.5% at time of sale 5% fee on rental income recently removed | At the end of 3–5-year hold period, investors can sell or postpone the sale of the property at which point a vote will be taken. |
How are the Listed Properties Selected?
Here’s the thing, they all seem to say the same stuff on their website, so here’s a summary of the investment strategies employed by all three platforms. It’s all quite general.
- Properties have to pass a rigorous screening and selection process.
- Use a network of investors, asset managers, brokers, banks and developers to provide deals, which allows them to filter and identify unique opportunities.
- Use data from leading third-party providers like REIDIN, to ensure that in-house research and analytical tools remain accurate and reliable.
Smartcrowd vs Getstake vs Baytukum – How Do I Pick?
While these crowdfunding platform offers simple user-friendly interface and vetted investment opportunities across Dubai, you will still need to do your homework and due diligence on the platform.
Here are key things that can help you make the right choice:
1. Investment Options
Have a look at the types of property opportunities offered by each platform.
Consider factors such as property types, locations, investment structures, ROI, and minimum investment amounts.
Do you see yourself owning a piece of their listed property? Do the ROI seem appealing to you or can you get better returns elsewhere?
As some properties can be more expensive than others, having a good understanding of Dubai’s real estate market can help you pick out the winners.
2. Track Record
Research the track record and performance history of each platform.
Under “Funded” and “Exited” properties on their platform, check out what annual rental income investors are getting back, what’s the ROI when the property is sold, and look for any notable successes or failures.
3. Crowdfunding Platforms Reputation
Go through the reviews and feedback from other investors who have used each crowdfunding platform. Consider factors such as:
- Platform reliability
- Fees
- Transparency
- Ease of use
- Customer service
- Investor Protection (i.e. how’s investments are structured, insurance, etc)
Links are in our comparison table.
Are Real Estate Crowdfunding Platforms Right for me?
Alright, now you can have a chance to get exposure to the property market in Dubai through these crowdfunding platforms. But, is real estate crowdfunding the right move for you?
Here are a few things to think about:
1. What’s your Holding Power?
How long are you okay with locking up your money?
Real estate investing is all about the long haul.
If you’ve got the holding power to weather the storm, you can hang onto your properties even when times get tough.
But if you’re feeling desperate, you might end up selling at the worst possible moment.
2. What do You Want Out of This Investment?
Are you in it for the steady rental income, or are you hoping property values will shoot up over time?
For example, if you want cash flow and rental income, investing in affordable holiday homes in Marina may give you more rental income as opposed to capital appreciation.
Figure out what your game plan. It’ll help you pick the right properties to invest in.
3. Market Cycle
Take a look at what’s happening in the real estate market. Are prices on the rise, or is it a buyer’s market?
Depending on the market cycle, you may look for different opportunities.
For example, if the property prices are going down, you may look opportunities more in the premium market that are undervalued.
Market cycles can significantly impact the performance of your investments.
