Property investment club

JohnBravo

Hi everyone,
What would you suggest or how many other options are there to actually invest in properties without being chained for another 20 years because of the mortgage?
20 or even 15 years is a long time, half of my production life.
I was looking a bit into tenants in common and also creating some syndicates to buy properties with minimal bank involvement.

I know that some people in Norway build houses collectively and they got houses almost for nothing.
Artificially inflated property prices in London does not attract me but some sheiks from UAE.

Please advise.
Thank you

eddddy

You're not really chained to a property for 15 or 20 years because of a mortgage. You can sell up at any time. (You just need to be aware of the redemption terms for the mortgage you choose.)

Buying with a mortgage vs buying with others (tenants in common etc)... The good thing about buying with a mortgage (vs buying with others) is that the bank gives you a very clear contract, and must stick to it. There is no emotion, changing of minds etc.

Banks won't argue with you about what colour to paint the lounge, whose turn it is to clean the bathroom etc. And they won't decide they want to sell up to get married and/or have kids etc, at a time which might not suit you.

Property Investment Clubs tend to be something very different. They tend to be about investing money to get returns rather than finding a place to live.

theartfullodger

A great opportunity for fraudsters & other dodgy persons...

jimbog

JohnBravo wrote: »

I know that some people in Norway build houses collectively and they got houses almost for nothing.

Oh dear, oh dear...

JohnBravo

jimbog wrote: »

Oh dear, oh dear...

What
"they got houses almost for nothing." - don't like this bit?
I know stating about getting things for very cheap is unwise, but you will find here and there that people help each other. Of course this is more a result of the community.
In our case a consumer-oriented community promotes financial selfishness (+£3 for a random charity) and more often people have to go in debt to do anything significant in their life.

However I just came to a conclusion that again FEAR is the only thing that disciplines regular citizens. Fear of losing job and a home in result is the best and probably the only motivational factor, so people remain in shape, you will see people with mortgages are more "serious" of course in the sense of this type of community.

@eddddy
Thank you for your answer. I red about tenants in common, I am not sure if this is suitable for me, but it still remains an option for others.

patman99

There is nothing stopping anyone setting-up an investment syndicate, but as most of the oes that have appeared in the past have been scams, not many people would invest in one.

If you want to make a few bob in property, then look at how much free cash you have (and that you don't mind loosing if it all goes wrong) and look to buy from auctions, do up and either sell on or rent out.

mik82

You can invest in property via a REIT. Most of them are commercial property but I think a residential one exists.
No tie to anything, sell whenever you want.

AdrianC

Let's say a house costs £200,000.
If 20 people share the purchase, they only pay £10k each. Great.
But they only own 1/20th of the house each. If it's rented, they get 1/20th of the rent - £30/mo each?
They pay 1/20th of the costs - but get 1/20th of any capital growth.

And what if there's a disagreement? What if somebody wants out? What if somebody thinks the kitchen needs doing, but somebody else doesn't? What if somebody's brother/friend needs somewhere to live, but somebody thinks they're a sleaze they wouldn't let to?

Far too big a risk of conflict and chaos.

If you want to do something like that, then look into something like TheHouseCrowd.

JohnBravo

I understand the risks and that participans can behave differently after a while. I still think thought that these risks are predictable and can be addressed in the contract.
Anyway buying and selling make more sense as this is a rather short term project, but can also propel new ones.
Buying and renting is rather a way of securing your money and get some small profit.

@mik82
I will have a look about REITs.

Thank you all for input.

JohnBravo

TheHouseCrowd is quite interesting.
Thanks AdrianC. Have you googled this or do you know someone that is using their services? It looks quite fresh.

AdrianC

JohnBravo wrote: »

TheHouseCrowd is quite interesting.
Thanks AdrianC. Have you googled this or do you know someone that is using their services? It looks quite fresh.

Yes, you could say I know somebody who has some money invested via them... <reaches for mirror>

"fresh"? Dunno about that. 140 projects underway, since 2011. Some of the early ones have gone through the full lifecycle and been sold already.