Eying up the hurdles that now face buy to let investments in this current climate Â – daunting. You may need to be an Olympic Â hurdler to overcome them and invest in property successfully. Â The main top five which stop many are as follows:
- Deposits are now as much as 25% to – larger cash injection.
- Valuations are not meeting sell price â€“ more cash to find.
- There are now large fees on arranging a mortgage â€“ more cash.
- Standard Variable rates are not in line with the base rate â€“ who is winning here!!
- Legal fees and all associated fees â€“ more cash.
Let us take an Â£85K house that is on the market â€“ and you get it for Â£80K (well done you may think). Based on a 20% deposit that is Â£16K to find for the deposit. Now along comes the valuer and he or she reckons that the property is only worth Â£75k and the mortgage company will only lend you Â£60K to buy the house â€“ leaving you out of pocket another Â£5K! The mortgage company says that they have a great rate at 4.99% (4.49 points above the current base rate) and they want to charge Â£2K for the honour of giving you such a high rate. (who is benefiting there then!) The associated legal fees are a variable butÂ on these type of buy to let investments you should set aside another Â£1K. When you get your tenant in, you have the usual expenses of which are obviously a variable â€“ but are time consuming and are by no means hassle free.
You will still need to shell out Â£24K.
Â£5K shortfall due to valuation
Â£2K for a mortgage arrangement fee
Â£1K legal fees
Not particularly attractive â€“ a fundamental reason for an alternative option!!!!!
Check our FAQs at The House CrowdÂ http://thehousecrowd.com/thehousecrowd/faqs/
We were very pleased this week to get an article about us and crowdfunding property investment published on the Daily Mail’s This Is Money website. We were less pleased with the trolls who decided to completely trash what we are trying to do without even bothering to try and understand it. Seems to me these people must have had some pretty bad experiences to end up with such a bitter cynical view of life. Still, on the plus side, we also had a number of very positive emails as a result of the article and several new investor applications. We are now well on our way to making our first crowdfunded property investment and are going to view some potential investment properties this afternoon.
Today is the official launch of the world’s first crowdfunding property investment company. (That’s us by the way).
If you haven’t heard of crowdfunding before and want to know more you can read all about it on Wikipedia. We hope you all agree it’s a great idea that can help people achieve much better returns on their savings and do so without giving the leeches “ who’ve just decided to put up their standard variable mortgage rates – any business.
Question:Can someone please tell me what the point of signing an agreement that allows one side (i.e. the banks) to alter the agreed rate payable whenever they feel like it.
Seems somewhat unfair to me.
Joint Ventures Property Investment
Back in 2012, when we were first starting out, we were the first to offer the property crowdfunding investment model. At that time, things were very different to how they are now. Just take a look at this quote from our blog back in March 2012:
“I’ve just been lurking around the property investment forums such as Property Tribes. There seem to be some interesting discussions about joint ventures in relation to property investment but some scepticism about the partners involved, especially as they all seem to charge fees in one way or another.
Not a true joint venture in my opinion.
Hopefully, people will realise we offer a simple, transparent way they can participate in a genuine joint venture and invest in property for mutual benefit.”
This is an example of what we were thinking about back in 2012 when we first launched.
However, since that time, we are pleased to have seen the property crowdfunding market catapult in popularity. Indeed, people did wake up to the simple, transparent joint ventures in property investment that we offered. So, too, did many other property entrepreneurs, who began mimicking our model and setting up their own property crowdfunding and P2P platforms.
Now, the industry is worth billions worldwide. We are proud to have been the first, and still the leaders, in offering a way to invest in a diverse portfolio of property with the potential for high returns.
Find out more by registering with us, or view our property investments directly:
Big thanks to all our friends and colleagues who turned up on Sunday and braved the cold in House Crowd t-shirts for our photo shoot. Although it was freezing, we managed to narrowly avoid the rain and Chris Bull, the photographer took some great shots.
To see more visit the housecrowd facebook page and don’t forget to click the like button whilst you’re there.