P2P Property

[Behemoth]

If you thought BTLers did nothing, sat back and just counted the cash, here's a chance to do less. This platform looks very well done from a software and interface perspective:

https://propertymoose.co.uk

The big downside is that rental income is given via divis, which will be massacred come April 16. If you earn >£5k in divis and are a higher rate tax payer already, then it's probably not very interesting. There's no ISA/pension wrapper, so their projected 5, 6% net yields will end up as more like 3-4% net net.

The upside is, unlike individual property holdings, CGT is split over lots of small chunks and so you can use your annual allowances (assuming the holdings go up at all). The other upside is that, like other P2P, the risks are spread across multiple properties. But there's still a big platform risk as these folks are unknown territory.

It looks like they hang on to properties for a short length of time (2,3,4 years) before disposing. I wonder why that is? Do they get cheap doer-uppers and turn them round?

Any thoughts, experts?

[rsbmw]

That looks pretty interesting

[Ozzie Osmond]

Well, the main page says that,

• 9,129 people
• have invested £3.9m - that's £427 each
• and received rent of £70,559 - that's just £7.73 of rent each!
• properties are sold on a fixed short term, in which time all of the stamp duty, agent's fees, legal fees to buy and legal fees to sell must be recovered. So let's guess you'll need 15% headline price increase just to get your money back.

My bet is the only people who are ever going to make any money out of this are the people running it, not the investors.

[onedsla]

Behemoth said:

It looks like they hang on to properties for a short length of time (2,3,4 years) before disposing. I wonder why that is? Do they get cheap doer-uppers and turn them round?

I figure their main revenue stream comes from the buying and selling rather than rental, hence in their interests to have a fast turnaround.

[Behemoth]

Ozzie Osmond said:

Well, the main page says that,

• 9,129 people
• have invested £3.9m - that's £427 each
• and received rent of £70,559 - that's just £7.73 of rent each!
• properties are sold on a fixed short term, in which time all of the stamp duty, agent's fees, legal fees to buy and legal fees to sell must be recovered. So let's guess you'll need 15% headline price increase just to get your money back.

My bet is the only people who are ever going to make any money out of this are the people running it, not the investors.

I think I've just come across this at a very early stage and they intend growing. The platform's software quality certainly doesn't warrant a paltry 9k people. I know how much these things cost to create & maintain. They're clearly aiming for the size of other P2P outfits like Zopa.

But the short turn around is curious.

[UpTheIron]

Behemoth said:

But the short turn around is curious.

Somewhere in the blurb it states that when it comes to sale time the shareholders can vote on whether to sell or extend. Also suspect a 3-5 year investment period is more palatable to most investors. If they grow and then add the ability to buy/sell shares that would allow the model to change.

[Behemoth]

UpTheIron said:

If they grow and then add the ability to buy/sell shares that would allow the model to change.

Yeah, it would make a lot of sense to have a secondary market so people can exit more easily. I guess they need to be a bit bigger before they can start doing that.

[drmotorsport]

I'm seriously thinking of investing via their competitor https://www.thehousecrowd.com at the moment. I like the idea of spreading the risk over multiple properties and as the properties are northern based, the yields are way better than down here near London.

[DonkeyApple]

Ozzie Osmond said:

Well, the main page says that,

• 9,129 people
• have invested £3.9m - that's £427 each
• and received rent of £70,559 - that's just £7.73 of rent each!
• properties are sold on a fixed short term, in which time all of the stamp duty, agent's fees, legal fees to buy and legal fees to sell must be recovered. So let's guess you'll need 15% headline price increase just to get your money back.

My bet is the only people who are ever going to make any money out of this are the people running it, not the investors.

Seems to just be a scheme to deliver jobs to a crew of turn around maintence chaps?

[Ozzie Osmond]

It's your money - but I wouldn't touch that one either. Have you considered buying shares in listed property companies with all the protection that brings?

"...sit back and watch your property portfolio grow", they say.

They then add, "Property values can fall. Your capital may be at risk & returns may vary." Hmmmm