SIPP investment in Property

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  • MalthusianMalthusian Forumite
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    This is an example of an investment I was particularly interested in, but the principle appears to be relevant to many investments being offered nowadays, be it student, care home or similar. So, in effect, it appears to me that I would be buying a buy-to-let property but without the hassle of management, maintenance fees etc. So isn't that a good investment?

    No, it isn't buy-to-let. With a buy-to-let you control who rents your flat. With this investment you have no control. You sit there and hope that the company behind the promise of 10-12% per annum can keep the rooms filled enough to keep paying you 10-12% per annum. If they can't, best case scenario is that you then have to find students or professionals to occupy your flat.The worst case is that someone else is in control of who gets to enter the building, and they have no incentive to fill up your room before they fill up their own.

    And you can forget about selling. Why would anyone ever buy your flat second-hand when they could buy one directly from the scheme promoters with a guaranteed return of 10-12% per annum?

    Alpha Properties may have been around for 17 years but according to their last accounts they had just £468k in net assets and the company was exempt from audit. Are you confident they have enough resources to pay all investors their 10-12% per annum if rent proves insufficient? If this kind of accommodation is yielding 10-12% per annum after all maintenance and management costs and the developer's own profit margin, it won't take long for competitors to enter the market. For how long will debt-laden students be willing to pay over the odds for rent so an investor can get a return of 10-12% per annum?

    All these investments offering storage pods, care home spaces, hotel rooms, student accomodation etc etc are essentially the same in principle.
    BTW. Where do I find out their debt/cover ratio?
    Ask them.
  • Thank you Malthusian for your time and help I really do appreciate it. It has made me look more in depth at these investments and given me a clearer direction. I would still like to know where I can fairly safely invest for a reasonable return of say 5% or some places to check out.
  • Not that many of you ( if any care) but I just had my latest tranche of interest from Dolphin.Lets not get into all the stuff about ponzi schemes being able to pay interest etc etc etc.I found out they sold 1.8 billion euros worth of of apartments over the last few years and they count RyanAir and Hyundai amongst their more wealthy investors.Perhaps, despite even ritzy levels of interest paid out they can make money. As someone, who spent 12 years in property development in the UK , i know how difficult bankers find it to deal with property transactions so I fully get why they and others might prefer private finance, albeit at higher cost, to take advantage of good deals. I never care about what the other guy makes in a deal so long as Im happy with my return.Each should do their own due diligence, weigh up the facts and the risks and if its not for them so be it.
  • kidmugsykidmugsy Forumite
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    I would still like to know where I can fairly safely invest for a reasonable return of say 5%

    Wouldn't we all? The only ones I know of are a few current accounts and regular savers.

    Or, come to think of it, annuities.
    Free the dunston one next time too.
  • MalthusianMalthusian Forumite
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    I found out they sold 1.8 billion euros worth of of apartments over the last few years and they count RyanAir and Hyundai amongst their more wealthy investors.

    An airline company and a car company have invested money into loan notes in an obscure German startup property firm instead of reinvesting it in aircraft or car factories or, in the absence of good opportunities, distributing spare cash to shareholders. Of course they have.

    For someone who talks about doing their own due diligence you are awfully quick to swallow unsubstantiated claims by the company.

    How was the trip to Berlin? Did you have any luck getting them to provide up to date audited accounts?
  • Ponzi scheme or con it may be, but for the last few years the 6-monthly payments (including the one I got last week) certainly spend like normal money.

    :beer:
  • Fairly positive review on The Landlord Pension site from Aug 2018, but I guess he's an introducer, albeit with long track record.

    For my part, I've had £110k capital repaid from Dolphin Trust over the years. A little more due later this year. Disinclined to roll over due to the increasing negative publicity though.
  • LungboyLungboy Forumite
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    Thanks person with one post, you've definitely cleared that up for us.
  • MalthusianMalthusian Forumite
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    Steam wrote: »
    Fairly positive review on The Landlord Pension site from Aug 2018, but I guess he's an introducer, albeit with long track record.

    Four years is not a long track record.
    For my part, I've had £110k capital repaid from Dolphin Trust over the years. A little more due later this year. Disinclined to roll over due to the increasing negative publicity though.
    I got paid interest from RBS on time this month but I didn't feel inclined to sign up to random forums and tell people about it.

    Funny how Knight Crofter never came back to us about those audited accounts he was going to request from Dolphin Trust during his fact-finding trip to Germany.
  • JonmgJonmg Forumite
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    I have been investing in Dolphin Trust for at least 10 year's and continue to do so, repayment of investment and interest payments have always been correct and on time. Sadly will be giving up soon, as new investments will only return 8% per annum. These investments have proven to be very reliable and wouldn't hesitate to recommend them.
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