Bricklane - Property ISA

firestone

ozaz wrote: »

I'm considering dipping my toes in. They now have around 20-25 properties and they have a welcome offer which reduces the initial investment fee down to 1%




All these factors appeal to me.



This might have changed since your post, but they do now refer to the ISA as a S&S ISA both on their homepage and FAQ. Unfortunately, the term property ISA does still appear in places.



I'm wondering this as well. I'm thinking that because Bricklane's REIT is not traded on a stock market it may be less volatile than REITs traded on stock markets. Can anyone comment?

Also, it focuses on residential properties, which I don't think is the norm for REITs. That may be an advantage or a disadvantage I suppose.

not sure if it will be less volatile but would guess it could be harder to sell as possibly a smaller buyers market.It is very similar to the likes of Property Partner & Property Moose and others in the P2P sector have you looked at them?In that they Crowdfund a property and pay the rental income out and with ways to sell but not always easily (but unique to each as to how)

ozaz

firestone wrote: »

not sure if it will be less volatile but would guess it could be harder to sell as possibly a smaller buyers market.It is very similar to the likes of Property Partner & Property Moose and others in the P2P sector have you looked at them?In that they Crowdfund a property and pay the rental income out and with ways to sell but not always easily (but unique to each as to how)

Yeah I've seen Property Partner and Property Moose (and currently have a small amount in a Property Partner account). But you can't hold them inside an ISA which is one of the things that appeals to me about Bricklane. Also Property Partner and Property Moose are more hands-on (in that you choose individual properties rather than prepared portfolios). Hands-off nature of Bricklane appeals to me.

Low liquidity is the main potential concern for me, but I won't be putting a significant amount in until I've tested selling a few times. I also feel this form of investing into property will become more mainstream as BTL loses its appeal so investor base will hopefully grow.

Alexland

ozaz wrote: »

Low liquidity is the main potential concern for me, but I won't be putting a significant amount in until I've tested selling a few times.

Even if you test the process of selling you might find you are unable to sell, or are but with a large loss, in future market conditions.

Sometimes on illiquid assets there are no buyers or only those buying at bottom dollar prices. As such the asset manager may put a freeze on withdraws to avoid everyone suffering large losses.

dunstonh

Liquidity is the big issue with bricklane or any other physical property fund. Suspensions are inevitable at some point.

AnotherJoe

ozaz wrote: »

I'm thinking that because Bricklane's REIT is not traded on a stock market it may be less volatile than REITs traded on stock markets. Can anyone comment?

An asset has a value, eg a price at which it will sell. The fact that its price isn't publicly available on a day to day basis, doesn't mean its not fluctuating.

Take a terrace of identical houses. Number 10 is bought and sold every 3 months over 20 years and you can draw a nice graph of its price going up and down. Number 11 is never put up for sale.

Its value still fluctuated just the same as number 10, merely because the fluctuation wasn't made public doesn't alter that.

More fundamentally, the fact that you cannot see what the value of Bricklane is at any moment should be very worrying rather than a good thing, because when you wish to sell, how do you know what you should expect to get?

Ubtree

Bricklane appears to be neither open-ended nor closed-ended: they appear to be able to issue new shares at will and buy them back (as an open-ended OEIC does), but the usual mechanism appears to be to invest by buying shares from existing shareholders and sell shares to existing or new shareholders (as with a closed-ended PAIF), but the shares are not traded on an open stock exchange and it is not clear to me whether the share price is determined by market value or based on net asset value. This simply makes no sense to me.

ozaz

Ubtree wrote: »

Bricklane appears to be neither open-ended nor closed-ended: they appear to be able to issue new shares at will and buy them back (as an open-ended OEIC does), but the usual mechanism appears to be to invest by buying shares from existing shareholders and sell shares to existing or new shareholders (as with a closed-ended PAIF), but the shares are not traded on an open stock exchange and it is not clear to me whether the share price is determined by market value or based on net asset value. This simply makes no sense to me.

Have you asked Bricklane to comment on this?

ozaz

AnotherJoe wrote: »

An asset has a value, eg a price at which it will sell. The fact that its price isn't publicly available on a day to day basis, doesn't mean its not fluctuating.

Take a terrace of identical houses. Number 10 is bought and sold every 3 months over 20 years and you can draw a nice graph of its price going up and down. Number 11 is never put up for sale.

Its value still fluctuated just the same as number 10, merely because the fluctuation wasn't made public doesn't alter that.

More fundamentally, the fact that you cannot see what the value of Bricklane is at any moment should be very worrying rather than a good thing, because when you wish to sell, how do you know what you should expect to get?

There does seem to be market data available for public viewing:
http://www.tisegroup.com/market/securities/8445
http://www.tisegroup.com/market/securities/9067

Ubtree

ozaz wrote: »

Have you asked Bricklane to comment on this?

I'm looking for objective comments, and I feel that I am much more likely to get these from forum members than I am from the fund manager.