Can You Build a Property Portfolio with £40,000?

Even with the current political and economic climate in the UK, there is no denying the fact that the property market is still attractive. It is still remains one of the best inflation-proof investments for anyone who can afford to get on the property ladder.  Unfortunately, the myriad of changes in the property investment niche (such as the new buy to let laws) and the increasing reluctance amongst lenders to provide funding for new investors mean that it is harder than ever to get on board.   At a time where you need around £100,000 as deposit to get on the buy-to-let ladder, how can you build a portfolio with 40% of that amount?

Crowdfunding to the rescue

Crowdfunding offers one of the best UK property development investment opportunities. Even if you have a few hundreds of pounds, you can immediately begin to lay the foundation for a property portfolio. With crowdfunding, you get to invest in a wide range of property options without actively taking part in any of the far-reaching decisions that come with property investment, from choosing a site to completing the property.

To build a property portfolio in the conventional way requires years of hard work where you have to work hard to buy or build property in optimal locations and then put in work to maintain a rental income. Even when you are buying to sell, you may still need to wait for years to be able to reap the dividends, if any.  There is also the hard work that comes with filling tons of paperwork, securing mortgages, staying on top of all your mortgage commitments and securing tenants.  Property crowdfunding, on the other hand, allows you to quickly get in the property pool without leaving the comfort of your home or worrying about any of the aforementioned challenges with conventional property investment.

With your £40,000 you can invest in as many properties as appeal to your investment appetite, within your budget.  The structure of most crowdfunding platforms means that this amount can get you a portfolio of up to 40 properties with just a few clicks!

However, it is still important to note that although the hassles of being a landlord are taken care of by crowdfunding, there are still inherent risks as is the case with all investments.  With proper selection of properties that will make up your portfolio and a perfect understanding of all the risks involved, you can build a property portfolio with £40,000.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure

Four Common Mistakes to Avoid When Considering Real Estate Investment

Expanding your income base is not only wise but extremely vital. Many people turn to real estate as it is a robust option for investment. And while there is a lot of information available on the steps to take when searching for property development investment and funding options in the UK, equally important to note are the pitfalls that often trip up inexperienced investors. If you’re considering entering the real estate development markets, here a few crucial mistakes to avoid;

• Lack of Extensive Research

Before diving in, it is important to conduct research into the market you are about to buy. When is a good time to invest? When is the best time to sell? What types of properties will cost you the most to develop but be worth it in the end? What are your personal aims and expectations going in and how will they be met? With proper research you will have answers to these questions and be generally better informed.

• Bad Budgetary and Financial Planning

A lot of buyers expect to just purchase a property, shell out a sum of money for repairs and maintenance, and start raking in profit. While property investment could be profitable, a variety of hidden costs can arise that were unplanned. New investors need a flexible budget and a solid plan to account for these costs and avoid ending up in a financial mess.

• Emotion over Logic

Purchasing an investment property needs to be a cold logical decision. While buyers may understandably have affinity towards properties that appeal to them aesthetically or emotionally, those same factors might be reasons for the investment to end up a financial failure. Investors need to consider features like purchasing and maintenance costs, how much they are likely to get in rent, and attractiveness of the property to renters/buyers before letting their personal preferences come into play.

• Self-Managing Your Real Estate Property

While some investors choose to manage their own property investments, this is often a bad idea especially for new and part-time investors. Hire a property manager and build a relationship with them. This way, you don’t have to personally deal with evictions, late notices and bad tenants.

• Bad Timing

The real estate market is dynamic, but often predictable. You can dither around only to miss a soft buying cycle. Similarly, you might rush in only to find that the market has lower depths to descend before it picks up, and you actually paid more than you needed to. Timing is key here; keep an eye on trends, and make sure you have all your bases covered before diving in.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure

Fastest selling property hotspots in the UK

In the past few months, the UK property market has seen some form of disruption due to the uncertainties trailing Brexit. Despite these challenges, property hotspots are still springing up all over the place for people who have the means to invest. The increase in house prices is seen by some as an avenue to make some extra cash with house owners putting up their homes for sell and opting for smaller properties. Read on if you are in the market for a property and wondering where your money will be best placed.

Newport in the south of Wales has been identified as topping the list of cities where you can buy a property quickly. Over the past few months, the time it takes to find a buyer has been drastically reduced as buyers appear to be coming over from areas where house prices are known to be rather steep. Home owners are selling off their small properties in places like Bristol and using the proceeds to buy larger properties in Newport.

Another place to keep eyes on is Cotswold. This location which includes Cirencester in Gloucestershire is expected to see increase in house prices in excess of 31% by 2021. This makes Cotswold a very good choice for property investors looking to buy a property that would appreciate with time. In fact, Cotswold is projected to be experience the highest increase in house prices in the whole of the south west.

If you are looking at the best location for a buy to rent, Liverpool takes the lead. Even though the city has experienced a bit of drop in rental prices, it is still a perfect location based on rental yields. Southampton and Greater Manchester, Nottingham, Cardiff also make the cut for best place to buy a rental property as they offer great opportunity for investors who are looking for property locations with great rental demands. This way, you are sure of renting out your property to a tenant fast and avoiding the long delay that can lead to damage in your property investment.

Birmingham remains a strong contender for one of the Best Places to Invest in Property UK 2018. In the past few months, the city has won a series of laudable achievements one of which is being selected as UK’s city of choice to host the 2020 commonwealth games. Add that to the big name employers operating in the city as well as access to amenities, Birmingham remains a compelling place for property investors in UK and outside.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure

Check out some of the largest UK property funds

Property funds are similar in principal to other collective investment funds where people pool their funds together to buy all kinds of assets from offices, shops, factories, and so on. Some of these funds may decide to invest by directly purchasing assets and managing them or buying shares of already running assets. The funds are divided into units which members buy. Each unit represents a share. Funds from the sale of these units are reinvested into the property fund. Basically, they are great ways to diversify one’s risks and own parts of a property one is interested in and can’t purchase because of insufficient funds. So if you are looking to invest in a property fund in the UK, here are some of the largest property  funds.

1 L&G UK Property Fund

L&G UK Property Funds is one of the largest property funds in the UK with a £3bn total worth. They have consistently ranked with a few other funds as the biggest in property investment. But while other property investment funds focus on just London and the south-eastern parts of the UK, L&G UK Property Fund spreads out its investment focus over a wider geographical area.

It is one of the few property funds that did not fold after the effects of the European Union referendum which is not surprising since it has always stayed at the top and has received reversal awards for it over the years. Chris, a property investment professional at Crowdlords has one theory for L&G’s success. He says “investing in UK property funds comes with a lot of risks, so L&G’s cautious approach to investment helps it adapt to changes within and outside the sector”. Legal and General Property keeps about a quarter of its assets in liquid cash at all times so that people investing in UK property funds feel a certain level of peace of mind.

2 First State Global Property Security

The fund’s objective is to provide the income to grow investors’ investments. They do not invest directly in businesses by acquiring assest, rather, they buy shares in already running ones. This is because it believes that indirect property investment is cost-effective since it saves time and the cost that is involved in researching and purchasing real estates.

 It was launched in 2006 and is currently worth over £275million. One of its major investment is Hammers on which is involved in student accommodation.

3 The Industrial Property Investment Fund

This property fund invests mostly in multi-let industrial estates in the UK. Since its launch in 1997, its drive has always been good quality and high yielding physical properties and the determination to always outperform benchmark.

Last year, according to the AREF/IPD UK Quarterly Property Fund Index, the Industrial Property Investment Fund was the best performing property investment fund in the UK, delivering a return of 25.4% even though it only focuses on industrial assets in the south east.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure

How the Poor can Buy Properties in the UK

The living arrangements of many below the ages 35-40 are indeed unpleasant with most simply unable to afford the purchase of a home. It is quite alarming that the average income of UK workers is barely able to cover the cost of rent not to mention purchasing a house for either residential or investment purpose.

While those who have a little financial buoyancy are able to seek out mortgages to be able to pay for properties they intend to acquire, it is really not a straight shot solution as the initial deposit for mortgages in this crazy property market is almost absurd. There are also multiple repayments attached to each mortgage deals as well as the inevitable interest rate hikes that buyers can never avoid.

Property investment is difficult even for the middle-class

With all these challenges accompanying the purchase of properties in the UK one has to wonder how possible it is for low-income earners to harbour a dream of owning properties of their own.

The mortgage option is basically out of the question since rent alone takes up to 40% of the income earned by those who are basically categorized as poor. Most low-income earners will just never be able to raise enough money for the down payment on an apartment, and even if some are miraculously able to finance such investment, the repayments and interest rate increments will be too excruciating to finance.

So for most of those that remain in the low-income bracket, a lifetime of tenancy is the obvious reality that is staring right at them…unless of course, something beyond the conventional arrangement occurs. And it seems that may be the case soon with news that the Government is set to finance a massive home building project that will see the construction of hundreds of thousand new apartment buildings across the UK.

Whether the soon-to-be-erected structures will be tailored towards affordable housing is another issue entirely though it isn’t far-fetched to see the cost of rent stabilize or slightly fall after this is implemented.

Property Crowdfunding: the only hope for the poor

Another option for those poor UK residents that want to have some sort of property portfolio even if it means they will not get to reside in them is to channel their little funds to Crowdfunding Property Investment UK.

Crowdfunding property investment has been proven to be a genuine investment route for low-income earners that do not want to bear the risks that accompany the conventional procurement of properties but still wish to co-own a property and of course, earn returns from leases and rents.

It is nearly impossible for a low-income earner to finance any property purchase in the UK; with crowdfunding, however, poor people are given a chance to at least be acquainted with the feeling of being a landlord while also earning some lucrative returns on the investment.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure

Crowdfunding investment regulation in the UK

The approach in Britain to the regulation of crowdfunding is widely admired around the world, according to the UK Crowdfunding Association (UKCFA and the sector wants to maintain that position globally and be involved in shaping the future outlook of this part of the financial services industry.

Most crowdfunding platforms in the UK are regulated by the Financial Conduct Authority (FCA), and platforms must obtain FCA authorisation before commencing regulated activity.

However, platforms in other countries may be governed by local regulators, and there may also be regulations for non-resident investors.

New rules are expected soon to update the current regulations which date from April 2014. These will come out of a review into the sector carried out in 2016 with the aim of making sure that crowdfunding firms meet all requirements to be ‘clear, fair and not misleading’ with customers.

The UKCFA believes that there needs to be some clarification of the rules to meet recent growth and that must also take into account the need to balance and to promote competition and ensure investor protections are proportionate to the risks.

The current rules are regarded as being robust for equity property crowdfunding investment platforms as under FCA rules investor money is held safely by the authorised firm until the target amount for the crowdfunding investment has been raised, and that the crowdfunding investment platform will be able to substantiate claims made in its investment memorandums.

The FCA has indicated, in an interim report published at the end of 2016, that ‘tougher rules are required to protect investors in crowdfunding platforms and it should be easier for investors to compare crowdfunding sites with each other, or with other asset classes, and this is not always easy due to ‘complex and often unclear product offerings’.

It is not unreasonable from this to expect that the FCA will demand that the crowd property investment platforms consider the best interests of their users by making relevant data more transparent, more consistent, and therefore more comparable.

Andrew Bailey, the FCA’s chief executive, has indicated that it is in the peer to peer lending sector as an additional source of capital that rule tightening is being considered as this is the section that has changed most. ‘What we are trying to do is strike the right balance between enabling innovation and protecting consumers,’ Bailey said.

Bailey has also indicated that stricter regulations are most likely to facilitate tougher rules on wind-down plans, additional requirements or restrictions on cross platform investment and extending mortgage lending standards to loan based platforms.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure

Is Property Crowdfunding Here To Stay?

Crowdfunding on the internet may have begun in 1997, but it took nearly 10 years before people began seeing it as a viable form of investment. Within a short time, individuals and businesses began adopting it as a means to raise the much needed funds to carry out projects.

Before crowdfunding in properties became popular, the industry was restricted to only the really wealthy or very large property development companies and institutional investors with the skills, experience, and resources to invest in, develop and manage properties.

Since it began gaining wide acceptance as an alternative form of investing through internet platforms, a lot of people have been championing the advantages of property crowdfunding. In the UK, this alternative form of investment has become a serious industry with very little signs of fading away. It has gotten so popular, especially with millennials that in 2015 alone, the UK property market saw investment in properties via crowdfunding attract investments in excess of £87 million.

Property crowdfunding makes it possible for just about anybody to get involved in the property market irrespective of experience, qualification or size of capital. It also helps reduce the risk associated with investing. Unlike the traditional mode of property investment where the liability resides solely on one individual or company, property crowdfunding shares this risk equally among the pool of investors. Of course, the risk remains, but if there is a loss, it will be suffered by more people effectively making it bearable.

While there are those who feel property crowdfunding is a fad that may fade out anytime soon, investors are a bit more optimistic. There are several indicators to point out that investing in UK property funds via crowdfunding has the potential to cause a disruption in the way people invest in properties, such as providing similar tax benefits like those associated with other forms of investment, especially in terms of equity thanks to the recent changes in tax laws.

There are even pointers that suggest the Government may consider crowdfunding as a viable solution to financing and that with a bit of regulation, it may even trump other traditional investment options such as savings and banking.

Like every other form of investment, there is no denying the fact that property crowdfunding has its own issues, a lot of which experts are working hard to iron out, but despite this, crowdfunding provides a much needed solution to debt financing for small and first time investors, developers and property entrepreneurs. This investment trend has experienced tremendous growth in countries like China and US and will likely be adopted by property markets across the globe in no time.

As interest rates remain at its low level, more and more people will start searching for a way to earn better returns on their money, something that regular savings may not give. There is little doubt that with a bit more control, crowdfunding will dominate the property market in UK, and effectively become one of the major sources of residual income for small time investors.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure

Making property investment easier and more accessible

CrowdLords was one of the first property crowdfunding property investment platforms, launching in the UK in 2015. The founders could see the attraction of the start-up crowdfunding model used by CrowdCube, Seedrs, and others, where in return for their investment, investors received shares in a new business with the hope that one day, there would be an exit that would provide significant profits.

What they didn’t like about investing in start-ups in this way was that the valuations that formed the basis of the investment were, at best, unverifiable and in many cases downright ridiculous. In addition, the likelihood is that most start-ups go bust and even if they don’t the likelihood of the company being bought or listed is very low indeed.

So, by taking the same proven model and applying it to property they could address all the weaknesses. The value of a property investment can be verified by an independent RICS valuation. The property’s ability to generate income, and therefore distributable profits, can be accurately estimated and the likelihood of finding a buyer, and therefore enabling your investors to recover their investments, along with a capital gain, is much higher than with a business.

They launched what they described as the first, true property investment platform in that they had a ‘two sided’ model. On the one hand they served landlords and developers seeking investments for their projects and on the other provided would be investors a choice of pre-screened, pre-packaged investments with varying risk/return profiles.

‘We set out to make property investment easier, more accessible, and more productive for more people, initially through buy to lets. However, almost immediately the Government announced the additional stamp duty on buy to let properties and that made it harder to source properties that fitted our model,’ said founder Richard Bush.

As a result, CrowdLords now offers short term investments into residential developments as well as buy to let investments. ‘Because property crowdfunding was very new at the time, investors preferred short term investments and the move to include developments was very well received.

Historically, the only people given the opportunity to make money from residential developments were super high net worth individuals with hundreds of thousands of pounds to invest. We have lowered the entry point to as little as £1,000,’ Richard explained.

Richard and his team take their responsibility for their crowd investors’ funds very seriously. ‘We were adamant from the outset that we had to do everything we could to protect our users’ investments and so we created a framework, whereby, the ultimate control of the funds was in the hands of an independent director, appointed to the Special Purpose Vehicle (SPV) Limited Company that facilitates the investment.

It is an additional cost that might lower the returns by a percentage point or two, but it provides reassurance way beyond the cost. As far as I know, we’re the only true crowdfunding platform that provides this extra layer of protection,’ Richard pointed out.

Currently CrowdLords is, on average, funding a new investment every month as the number of users increases, largely through referrals from existing users. Their growth has been much slower than that achieved by others. ‘Building a sustainable marketplace takes time and patience.

As long as our investments continue to perform to plan, our investors receive a good return and are happy with the service, then we are content to grow at a slower rate,’ Richard added.

The team at CrowdLords are continually looking to enhance their proposition and plan to launch debt and even ISA based products in 2018 so that they can, if required, provide the full range of finance needed by developers and landlords removing the need for bank finance altogether.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure

The UK Housing Crisis and the Conundrum for First-time Buyers

The UK housing market has seen its fortunes upended over the past few months. A number of worrying factors are to blame for this. While the blame on Brexit and the ensuing political nightmare hovering over the country cannot be termed as misplaced, new government policies seem to be causing problems of their own.

Government clampdown on landlords

First, it was the 3% Stamp Duty Land Tax (SDLT) surcharge on landlords looking to purchase additional properties in April 2016 which was introduced to put a check on serial buy-to-let investors.

Then came the taxation reform for buy-to-let that shook landlords further. This reform meant that landlords will be forbidden to offset all the interest of their mortgage against income from rents prior to calculating the tax due.

The new rule took effect in April 2017, and is expected to phase in between now and 2020, where a 20% tax credit will be set. From the April 2017 kick-off, landlords are allowed to only offset 75% of their mortgage interest against their rental income. In 2018, it will be reduced to 50%, then in 2019 to 25%, and zero in 2020.

This will ultimately lead to increased tax bills, whether an investor’s income increases or not. This has seen many landlords serve their tenants notices and sell off their properties.

Thirdly, a new buy-to-let lending rule came about in September 2017 for landlords looking to get mortgages for additional properties. The new rule empowers mortgage lenders to thoroughly review a landlord’s existing portfolio and business plan to assess their viability. This means that one or two unprofitable properties in a landlord’s portfolio can decrease their chances of getting a mortgage loan.

Investors, as a result, are finding it hard to place a finger on the best property investment in the UK. Many are retracing their steps, and others are halting their plans on sowing in the property market. Old landlords are leaving the market, and new ones are skeptical about joining.

These and other factors have led to a crisis in the British housing market. Home ownership is decreasing, prices are slumping and investment growth is slow.

The prospect for first-time buyers

In a bid to encourage first-time buyers to invest in property, the government introduced a new tax system which will see stamp duties for properties up-to £300,000 removed – for only first-time buyers. This reform will see four out of five first-time buyers save as much as £5,000.

Also, people spending more than £300,000 and up to £500,000 on properties for the first time will also enjoy from this move. The first £300,000 of the purchase price will not be taxed.

However, the office for budget responsibility (OBR) has stated that the favour for first time buyers may likely see house prices rise by 0.3%, with most of the raise coming in by 2018.

What this would mean is that the main gainers from this move will, ironically, be current property owners, and not the first-time buyers themselves.

Conclusion

While first-time buyers are being given the opportunity to borrow a little more, and purchase the property they would have normally not been able to, they would still be buying for hefty prices. This is incomplete/unsatisfactory conclusion, there should be a solution, such as the government’s rent-to-buy scheme.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure

How to Leverage Crowdfunding to Profit from the Lucrative UK Property Market

The idea of investing in commercial real estate conjures up images of six-figure profits, searching for investment partners, and dealing with business tenants. In reality, buying commercial property can yield a passive flow of income for you and doesn’t always require that you have so much capital of your own.

With opportunities in property markets such as in the UK looking up, it is wise to seize the momentum and create a stream of passive income. The good news is that you no longer have to think of relatively small investment as new and creative funding patterns are springing up.

Crowdfunding has been one of the most popular of these new real estate investments standards since the past decade; plus it’s surprisingly simple and potentially profitable. It involves raising the capital needed for a commercial property funding by pitching directly to a group of wide and diverse investors.

According to statistics, this property funding method accounted for over £25 billion in real estate transactions globally in 2015.

Location is still king

If you have ever read or done anything in real estate, you’ll know that location is the most important factor that ultimately decides your success; not price. You must have heard the often used phrase: “location, location, location.”

Is the emphasis any less today? No. Location is still prime in real estate, and particularly so if you’ve ever considered investing in commercial property. Generally, the value of property varies greatly depending on its location.

Besides ease of access, a good property location attracts higher rent and higher resale value. Property prices gains in value as the location gets better. This, however, does not meanthat when investing in commercial property, you should only buy in locations that are absolutely the best, even if the property is the most expensive.

The reality is that without a good location, all the promising stats will quickly become irrelevant and the property will dip in value, regardless of the size, quality and initial buying price.

There are a lot of important factors that should sway your commercial real estate investment decisions, and price and location must always come tops. In fact, they go hand in hand. Price is vital, but location is more important.

For example, as the UK real estate sector (and especially the London market) continues to show potentials, just as forecasted by property experts, it’s a good idea to join the ladder now using some smart investment options such as a property crowdfunding and investment in London.

Current data from the Office for National Statistics (ONS) shows prices in the UK market are dipping; and combined with shortages of homes, medium and long term investors are projected to gain better return on investment.

A nice location for your commercial property investment, like London, will trigger greater demand and better chances of a profitable selling price.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure