Invest in Property from as little as £250
I love property but do not have the time or the capital to invest in as many properties i would like. But as a savvy business minded women i came accross a GREAT platform that helps you invest in property with the money you have for a fee of 2%. What a clever way to get your foot in the door and on some part or the property ladder - all be it you will be sharing it with about 20 others... However I would rather be sharing a part of something than having nothing at all!
I have been using Property Partner for a while now this is my review of them.
The Property Partner Review:
Pros
Investors can buy shares in UK properties
Secondary market to buy and sell shares
Extensive research performed on property purchases
Property usually secured at a discount
Pre-fund investing for upcoming properties
Auto invest for those who want a hands-off experience + 3% interest paid on unallocated auto invest funds
Dividends paid monthly
Possible tax benefits for some
Instant debit card deposits
Easy to use website
I was sceptical of them but their great web chat guy actually gave me a ring talked me through all my questions. ( A UK person called me back)
Cons
Dividend yields can be low
Some properties are leveraged with mortgages, increasing risk
Risk if Property Partner stops paying on the mortgages
Fine print in terms gives company final control over the properties
5-year investment term means many unknown outcomes
Competitors of Property Partners
Property Moose, Lendinvest, The House Crowd ( this we very complicated and i was not very sure if i would actually get my money out again? ( I tried Property Moose - however they only had one property at the time for me to invest in so very little to go on - i preferred a bit of diversity and the buy back or sell option is great on Property Partner) - there are a few others but i'm not convinced they are legit or if you would ever get your money out in a hurry... I like the way you can see real time what your investment is worth and you can buy for as little as 55p which i did once.... great!
Property Partner Review:
I have been investing in Property Partner since early 2016. As with all property equity sites, the unknown outcome factors make for an interesting investment. They offer a well rounded portfolio - and now have just started on commercials properties and student accommodations. Yields on deals outside of London tend to be more attractive. I have been investing in properties outside of London as I believe the London prices are inflated. Monthly dividend payments have always been received on time and so far, I have been very satisfied.
What Is A Property Partner?
Property Partner acquires property (sometimes with mortgages) then offers the property shares to investors. It’s important to think of Property Partner as an equity site rather than a peer to peer lending company. The properties are held inside individual SPV companies registered at Companies House. Property Partner manages the rental collection and pays monthly dividends. They also handle any needed maintenance. Properties are held for a period of five years at which time, shareholders vote on holding or selling.
When Did Property Partner Launch?
January 2015
Are They Regulated?
Yes, by the UK Government’s Financial Conduct Authority #613499 under interim permission. FCA regulation is nothing like the FSCS (Financial Services Compensation Scheme) that covers consumers from bank failures. The FCA does have the ability to pursue criminal action against companies it finds are in violation of its standards, but it’s not a government entity and is funded by the very companies it regulates.
How Do I Sign Up?
Click Here and receive £250 cashback when you invest £10,000. (Property Partner pays me a small referral fee when you open an account through one of my links. This fee comes at no expense to you and when you sign up for an account through my website, it allows me to continue to operate My Business Online helping you find work from home opportunities and find out ways to become financially independent of a JOB.
Who Can Open An Account?
Anyone who can pass the security verification checks.
What’s The Signup Process Like?
They run the usual i.d. verification checks to make sure you aren’t a money laundering pilferer.
How Are Deposits Made?
Debit card card deposits (recommended and free) or bank transfers. Minimum you have to put into your account is £250 however you can invest in a property for as little as 55p - which is AMAZING. I had £1 left in my account and managed to buy 55p = 1 Share of a massive building ... and guess what I managed to sell that 1 share a few weeks later for 90p - not bad return on investment - all be it 35p....
What’s The Minimum Deposit / Investment?
Deposits: £250 minimum Pre-orders on new offerings: Non minimum Secondary market shares: 1 share minimum (price varies)(i bought my lowest share for 55p)
Do I Need Funds In My Account To Buy Shares?
Yes but you can use a debit card for instant funding. You only need a one off deposit of £250.
How Much Interest Return Does Property Partner Pay Investors?
Property Partner doesn’t pay an interest rate since investors actually own the properties. They pay monthly rental income in terms a dividend yield. Net dividend yields range from 2-6.9% but can be affected by rental occupancy and delinquent rent payments.
Are Dividends Paid Immediately Or When The Investment Starts?
Dividends start to accrue immediately upon share purchases.
When Are Dividends Paid?
Fifth of every month or the following business day on bank holidays.
You can chose to have it paid out into your account or leave it in the account.
Am I Lending To Property Partner The Platform?
Neither. This is the part I really really like as its very simple you actually OWN SHARES of each property you invest in. Each property is held inside a separate SPV Company which is registered at Companies House. Property Partner is more offers an equity investment rather than peer to peer investments.
What Are the Fees? This is the best bit!
Share buyers pay a 2% one-off fee of funds invested into a project (new and secondary market investments). Share buyers also pay a 0.5% fee which goes to the HRMC for Stamp Duty. There are no fees for selling shares.
Property Partner charges 10.5%+VAT (total of 12.6%) of gross rent for management and rent collection. Other fees are added to the property acquisition including mortgage origination fees.
What Are The Length Of The Investments?
Five years - that doesn't mean you need to keep your money in for 5 years you can pull all your money out in a flash....
Is There A Secondary Market? Such a bonus!
Yes. Investors can buy and sell shares at a price of their choosing, including at premiums or discounts.
There’s no charge to sell shares on the secondary market. Share prices are determined by independent monthly valuations and buyers are always offered the cheapest shares first. The secondary market for selling can be somewhat stagnant at times, so don’t rely on being able to quickly offload shares, even at a discount.
Property Partner also has a bid / offer option on the secondary market. This is where you can bid a price you are willing to pay as a buyer, or offer a selling price you are willing to accept as a seller. It’s an interesting concept but it does complicate the once simple secondary market so personally I don’t use it.
What Are The Main Risks?
Platform failure: If Property Partner fails, there are many unknowns as to how investors would really fare. Which has been going since 2015 and I have had dealings with them prior to investing and seen them go from strength to strength. Property Partner states each investment is individually ring-fenced outside the platforms assets and liabilities and uninvested funds are held in a segregated bank account. Since investors own property shares held within an SPV Company, in theory a platform failure wouldn’t be catastrophic. How administrators would wind up Property Partner’s affairs and continue to collect rental payments is anyone’s guess. Let’s hope we don’t get to find out!
Tenant defaults: If tenants don’t pay rent, then investor returns would suffer. You rely on Property Partner’s ability to implement quality management and attract quality tenants. No issues in the properties I’ve invested in so far.
Mortgages: Property Partner sometimes acquires properties using mortgages. Mortgages increase investment risk because if Property Partner don’t make the payments, the banks could repossess.
Calculation errors and unpredictable events: There are so many unknowns that go along with landlording. If Property Partner miscalculates expenses or valuations are incorrect, investors may lose money. Tenant property damage cold also reduce returns.
Property market downturn: Property values could decrease and be worth less than they were purchased for. Property Partner is heavily invested in London, a market considered to be on the verge of a bubble. Having mortgages on properties also increases risk during a downturn.
Sector specific: Being 100% in the real estate sector is risky should a downturn occur.
Is There A Provision Fund?
Property Partner withholds a repair fund for each property for future use.
What Happens If Property Partner Goes Bust?
Investors property shares are ring-fenced and held separately within SPV’s. Any uninvested funds are in a segregated Barclays account. In the event of platform failure, third party liquidators would be appointed to manage the properties “in accordance with terms of the investments”. All uninvested funds would be returned to investors.
How Is The Deal Flow?
Property Partner has a consistent flow of new property deals with one or being offered at a time. Recently they have been offering geared (mortgaged) apartment blocks. Since opening in early 2015, Property Partner has offered 360+ property deals with a total investment of over £20.5m. Impressive!
THUMBS UP FOR PROPERTY PARTNER:
You’re Investing In Property Located Throughout The UK
UK Property has always been secure investment. Property Partner has a very experienced team who are able to locate quality investments. I believe this is a relatively secure investment and in the worst-case scenario, rental dividend payments should partially offset any potential property price declines. Property Partner now focuses on areas outside of London which is a good move in my opinion.
Secondary Market
The market is great for buyers trying to diversify their holdings or new investors who are building a portfolio from scratch. Selling on the other hand can be slow going so plan on holding any shares you buy long term unless you are willing to sell at a steep discount.
Low Minimums
It is possible to buy a single share of a property which helps when reinvesting dividends. Property Partner’s low minimum makes it easy to diversify across many properties.
Auto-invest
Auto-investing alleviates some of the headaches and hassles of manual investing. After an initial lump sum investment, a monthly contribution amount can be set and Property Partners invests the contribution into a minimum of five properties:
Auto-invest allocates your funds into the next upcoming five properties regardless of when they occur. Investors are now paid 3% interest on any unallocated funds set to be auto-invested
Personally I don’t use auto invest as I like to pick and choose which property shares I buy but if I wanted to save time, I’d consider using it.
Pre-funding
Property Partner offers pre-funding (email notifications are sent) to investors prior to new properties being released. Depending on the size of the deal, allocations are given to investors in equal amounts. Sometimes it’s possible to receive 100% of your pre-fund allocation but it all depends on demand and supply and it’s difficult to predict. If you’re allocated more shares than you need, you may not be able to sell the excess on the secondary market for plan accordingly. There are currently no pre-funding limits.
Security
The properties are the security. Nothing better than owning brick and mortar. All properties are owned by an SPV which can be viewed on Companies House. Some properties do have partial mortgages on them which Property Partner acquires.
Deposits and Payments
Property Partner allows debit card payments for instant deposits at zero cost to investors. Rental dividend payments are deposited into your holding account and I have always been paid on time. Withdrawals to your bank account are fast and easy.
The Website
I found the website great - it could do with an app but i'm yet to see the development of one. But in terms of easy of use the website is GREAT and very easy to use and understand.
Deal Flow
There are more than enough properties to choose from and never a shortage of investment opportunities be it through buying first time or resales. With 300+ properties offered since launching, the deal flow has been excellent.
Rental Yield
Every property you invest in will pays a rental dividend each month, as long as rent is collected.
Possible Tax Advantages
I usually don’t discuss tax in the reviews as everyone’s tax situation is different but Property Partner may offer some of you certain tax advantages using the HRMC’s Capital Gains Tax allowances. Please consult your tax professional for more advice on this.
THUMBS DOWN FOR PROPERTY PARTNER:
Low Dividend Yields
Compared to competing peer to peer lending sites, Property Partner’s estimated returns are on the low side. Property Partner estimates returns will be in the 13% per year range but I can only base returns on dividend yields as future valuations are speculative. Current dividend yields range from 2% to 6.9%. Any capital appreciation will be a bonus but isn’t guaranteed. Investments may offer tax advantages for some people.
Gearing / Mortgages
Property Partner often uses mortgages to purchase properties on behalf of investors. Loan to values are up to 60% and mortgages result in lower dividend yields since a mortgage payment must be added to the expenses.
One of the greatest risks to investors is reliance on Property Partner to make the mortgage payments. If they don’t pay, the bank could foreclose on the property and investors could lose everything.
Mortgages always increase risk. With future interest rate rises a certainty, it remains to be seen how Property Partner will address the mortgage situation. Personally I think Property Partner should stick to allowing investors to fully fund properties with 100% cash. You can read more about how Property Partner addresses leveraging here.
Five Year Investments
Five years in crowdfunding / peer to peer lending can feel like a lifetime. No-one knows how these property investments will pan out after five years so there is some obvious speculative risk that accompanies investing through Property Partner. I’m comfortable with the risk level but only time will tell how well the properties perform.
My Strategy
As time has progressed, I like Property Partner more and more. The experienced team appears to run a tight ship and I particularly like the analysis they provide on each property highlighting why one should invest. Currently I own shares in over 15 properties as I believe diversification is key. My general view is diversify, invest in properties that have good growth and some that have good yield - don't put all your eggs in one basket. I view Property Partner as a long term investment and short term. Hold on to some and move others along as they hit their peek.
Partner Review Conclusion
My experiences investing in Property Partner investing have been encouraging. There are some definite pros and cons. For those looking for more hands-off investing, the auto-invest feature may be beneficial. The low minimum share purchase amount will suit people of all budgets and pre-funding means one doesn’t have to be online at the time of new property offerings. Projects are held for a period of five years which makes it a longer term investment. Despite the downsides, I will continue to invest through Property Partner. I hope my Property Partner review will help you find an outlet for your investment portfolio and getting your foot on the property ladder... even if you cant invest in a massive portfolio yet. You can at least own part of a variety of portfolios.
** This Property Partner review is for information purposes only and should not be regarded as investment advice. Opinions expressed in this Property Partner review are current opinions based on my own personal experiences. Equity investing contains risks so never invest more than you can afford to lose. **
