Peer-to-peer lending sites: MSE guide discussion

fun4everyone

use ISA allowance for stocks and shares imo, more growth long term.

I'm still in p2p though even after the collateral debacle.

Fatbritabroad

Yep that's why most of my money goes there. And why I'm loathe to put more in my existing platforms as I think platform risk is the biggest risk. There is a danger mind you that by spreading myself too thin there's a self fulfilling prophecy as alot of the other platforms don't have much history

masonic

Fatbritabroad wrote: »

I quite like the look of bond Mason but the lack of an isa makes it a non starter for me

Isn't Bond Mason unregulated though? Not that I think regulation brings much in P2P, but at least there are some limited consumer protections, such as access to the FOS.

Fatbritabroad

I hadn't looked that far it's more the diversification I liked and the expertise. I think I'll probably do the property crowd funding sites next given the money off these are dividends not interest I can use my allowance for that. Even 8% interest just isn't worth it if I'm going to be taxed 40% for the risk imo plus the hassle of filling in self assessment forms

Fatbritabroad

Looking at bricklane, crowdlords british pearl and property partner and crowd2let. As in researching them not looking to invest yet. I'll probably start with property partner and bricklane given these have been going longer

Money_Grabber13579

Fatbritabroad wrote: »

I hadn't looked that far it's more the diversification I liked and the expertise. I think I'll probably do the property crowd funding sites next given the money off these are dividends not interest I can use my allowance for that. Even 8% interest just isn't worth it if I'm going to be taxed 40% for the risk imo plus the hassle of filling in self assessment forms

What property development sites are you looking at? I’ve been investing in The House Crowd for about 4 years now and their offerings seem to have changed quite a bit over that period of time, first equity in buy to let properties, then loans secured on properties and most recently property development loans. The result is that dividend income has changed to interest income (which I don’t really mind that much as I make contributions to a pension to ensure I come below the 40% tax band).

However, i’ve probably invested more in The House Crowd than I should have (!) as a proportion of my net wealth so trying to gauge what the general opinion of them is to determine what level of risk I have exposed myself to? I haven’t had any problems yet, other than development loans not being paid back on time I.e. the development takes much longer to build and sell than expected, but appreciate this may not be the case for everyone.

takesyourchances

Fatbritabroad wrote: »

I hadn't looked that far it's more the diversification I liked and the expertise. I think I'll probably do the property crowd funding sites next given the money off these are dividends not interest I can use my allowance for that. Even 8% interest just isn't worth it if I'm going to be taxed 40% for the risk imo plus the hassle of filling in self assessment forms

I had 4K invested with Property Partner, the site works well and all dividends was paid on time while I was with them. I had no problems and enjoyed using the site.



I wanted to invest more in property and held 3 property IT's too. I asked myself would I feel comfortable going towards 10K and beyond in property partner or crowdfunding and what concerns me the most is platform problems / failure and if the secondary market dried up on PP it could be very, very illiquid.

Thankfully I never got involved with property moose and what went on there. I did look at it, but did not go for it thankfully as there was no secondary market after it was removed.

As I started to run down P2P after Collateral, I felt I wanted to tidy my direction up so took the decision to sell out of property partner which was fast enough on the secondary market at the time and put the 4K into the property IT's as I feel more comfortable long term holding these and wanted to tighten my plan up going forward.


At the moment I have around 10K and growing in 3 property IT's, Standard Life investment property, f&c commercial property and Tritax Big Box. I understand Brexit may shake property, but I won't sell and hold long term / no plans to sell and hopefully the dividends remain stable and re-invest.



My own personal conclusion having used Property Partner was I felt it more stable long term using property IT's over the crowdfunding route and the decision was made when I did not feel comfortable increasing my investment to higher levels, were I do with Property IT's. I may add in Picton Property Income as my numbers increase higher.



I also have infrastructure IT's which are property related too, HICL for example.



I am not sure on the other crowdfunding platforms if they are in profit, but property partner did not seem to be in profit at the time I was invested, this added to my concern too. I feel the biggest risk is platform failure, which would present many unknowns.



If you do not want to hold property IT's in your ISA you could hold outside and use your dividend allowance and there are other trusts for residential property too, if you wanted exposure to those like PP mostly is.



I never got much interaction / interest on the crowdfunding property aspect on UK forums, it does not seem as big in the UK compared to say the US were some big numbers are invested in crowdfunding property from US FIRE bloggers.


I have opted for the IT route for property exposure, I will increase it more from April on along with other investnents and want to add more into Tritax Big Box as this sector has good long term prospects I feel and I like how their business model is.



I liked the idea of equity share holding via crowdfunding, but I have streamlined my plans down to what I feel is much more long term buy and holds and I don't get that same feeling from crowdfunding platforms or P2P platforms. These are my thoughts and I know others my feel different and there is nothing wrong with that, but just giving my thoughts from the point of having been invested in this direction and my thought process on changing it. Hope it helps

Fatbritabroad

Thank you all opinions welcome yes the platform risk is my biggest fear

I've not looked at investment trusts much I must admit. Majority of my money is in blackrock and vanguard lifestrategy all equities about 70k in total with a couple of small satellites (2000 to 2500 each pantheon, vanguard smaller companies city of London and fundsmith just to play to be honest.)

Are the property IT more stable share price wise? It'd be nice to have something that paid income that I could keep 'shorter term' money IN? accepting I understand you shouldn't put money in shares you need. Also I'm then not sure about rebalancing? The small funds above I'm generally intending to just buy and hold rather than add to to see what happens I presume a larger investment in Property IT would be OK in the same way?

masonic

Fatbritabroad wrote: »

Are the property IT more stable share price wise? It'd be nice to have something that paid income that I could keep 'shorter term' money IN? accepting I understand you shouldn't put money in shares you need. Also I'm then not sure about rebalancing? The small funds above I'm generally intending to just buy and hold rather than add to to see what happens I presume a larger investment in Property IT would be OK in the same way?

While we're perhaps straying a little off topic for this thread, property ITs can be as volatile as other traded shares and I wouldn't put shorter term money in them. I hold three fairly large ones, but that's only because I like to buy what's on discount and avoid what's at a premium. The ones I hold have had peak to trough losses of 60-80% in the last house price crash (I didn't own any of them at that time!), so low risk they ain't.

takesyourchances

Fatbritabroad wrote: »

Thank you all opinions welcome yes the platform risk is my biggest fear

I've not looked at investment trusts much I must admit. Majority of my money is in blackrock and vanguard lifestrategy all equities about 70k in total with a couple of small satellites (2000 to 2500 each pantheon, vanguard smaller companies city of London and fundsmith just to play to be honest.)

Are the property IT more stable share price wise? It'd be nice to have something that paid income that I could keep 'shorter term' money IN? accepting I understand you shouldn't put money in shares you need. Also I'm then not sure about rebalancing? The small funds above I'm generally intending to just buy and hold rather than add to to see what happens I presume a larger investment in Property IT would be OK in the same way?

Glad it helped yes platform risk is the biggest risk -also the founder of PP Daniel Gandesha stood down as the CEO which I found a bit strange considering he was young and developed it and the business is only a few years old.



I also have about 60K in Vanguard Lifestrategy and 5 small satellites of around 2000 - 2500 each as well including small caps.



If you are also looking to start an income stream it is worth looking further into IT's. I hold CTY also, just over 6k in it. The property IT's have dipped a bit recently in share price and discount / premiums can fluctuate, but they are well worth exploring more into and it would take a lot of work to get diversified with property crowdfunding like PP and as we know that can all go out the window if the platform goes pop. I spent time spreading over loans with Collateral and now was all a waste of time.



REIT's have to pay out at least 90% of its taxable income to shareholders annually in the form of dividends.



The Standard Life Property IT I hold pay's out around a 5% dividend, which is more than most properties yield on property partner on average.



You can see the share price over the last 10 years on the charts https://www.hl.co.uk/shares/shares-search-results/s/standard-life-property-inc-trust-ord-1p


As we know, past performance and all that.



Property IT's I feel have their place in an imcome style portfolio as they are income producing assets that are held and decent dividends and they have to pay out a large % of profits, but again I would not count on short term for captial, but rather to build the income stream up and hopefully longer term captial growth.



With property partner etc the secondary market is only within their platform so a stock exchange IT I feel there is a better chance to sell out or sell part of your investment when needed. The dividends have been solid paying so far too.



F&C pay's monthly dividends - https://www.hl.co.uk/shares/shares-search-results/f/f-and-c-commercial-property-trust-ltd-1p


I see it is on a discount at the moment, if I had ISA allowance I would most likely add some in but saving cash to April.



Tritax BigBox is newer and more a specialist sector with the massive warehouses for likes of Amazon, the share price has had more fluxuations lately and is down, again I am going to add in April as I like what they invest in and they are working on increasing the dividend payouts and leases are signed for a good number of years and the sector is growing along with online retail.



https://www.hl.co.uk/shares/shares-search-results/t/tritax-big-box-reit-plc-ordinary-1p


I don't hold Picton, but once I get each of these 3 property IT's to say 5K each, I may add in Picton https://www.hl.co.uk/shares/shares-search-results/p/picton-property-income-limited-ord-npv and you can see the chart over the last 10 years it would of been a good holding, but again past performace and all that, but it is an IT I have my eye on to add once my others increase.



I rebalance my IT's with fresh money as such rather than buying and selling due to trading costs. I want to bring Tritax up more in line with my Standard Life and F&C so will add a bit of a lump to it in April type idea.



Also I have added cash on top of some dividends for example to say £1000 and added to Standard Life Property, with F&C and Tritax they are part of the monthly IT's I can add to on HL.



Hope this helps, I would explore the REIT's against the Property Crowdfunding more, I spent many hours looking into them all and decided on the REIT route as my property exposure. .