Property ISA

new_investor?

I recently inherited some money and am considering what to do with it. Cash ISAs don't seem to offer anything better than other savings accounts but I came across something called a Property ISA which appears to be similar to a stocks and shares ISA but with returns from rent from the property. Does anyone have any experience of this type of investment?

AnotherJoe

No such thing. There are various property related funds you can hold in a S&S ISA, that must be what this is. Or a scam.

dunstonh

There is no such thing as a property ISA. There are property investment funds which can now be held in ISAs (change to allow that was about 6 or 7 years ago - I cant recall exactly). However, it is doubtful that single sector investing into property funds would be a logical way to invest.

There are a fair few scammers on the unregulated property side of things. Usually offshore property but also holiday lets, storage pods, airport parking and student accommodation. The people investing in those / being scammed are usually fed a load of lies.

bowlhead99

Also, the "Innovative Finance ISA" will allow you to put p2p lending into an ISA wrapper; a subset of this is likely to be the type of p2p investment which supports property acquisition finance and for which the borrower intends to pay the loan interest from rents received.

However, these products are yet to gain any real traction yet as very few IF ISA providers are authorised so far. Many others are working towards getting authorised for it (and in some cases, deciding whether they should bother or not, pending further potential legislation changes and seeing what their competitors offer).

AnotherJoe

dunstonh wrote: »

There is no such thing as a property ISA. There are property investment funds which can now be held in ISAs (change to allow that was about 6 or 7 years ago - I cant recall exactly). However, it is doubtful that single sector investing into property funds would be a logical way to invest.

Its no more illogical than investing in BTLs (through being a landlord) instead of investing in shares (whether directly or funds) with some proportion of your investment capital. There seem to be a fair number of people who do that judging by posts here.

It could even be more "logical" than direct BTL, eg instead of putting all my investment capital into one or two houses, i spread it amongst many by investing in property related shares. Same principal as buying a fund rather than individual shares. Harder to invest directly in residential though. I know there are one or two companies out there. Plus related areas. Say, house builders, commercial property especially if you can find a fund specialising in smaller properties rather than massive shopping centres etc, and so on.

new_investor?

Thanks for the comments, it's something I saw on the Zoopla website but when I googled it to find out more nothing came up. I'm starting to think I might stick to ordinary savings accounts!

AnotherJoe

new_investor? wrote: »

Thanks for the comments, it's something I saw on the Zoopla website but when I googled it to find out more nothing came up. I'm starting to think I might stick to ordinary savings accounts!

That's throwing out the baby with the bath water.

If you want to invest in property there are many ways (as alluded to above) of doing it without being a landlord, and they are less risky. Unless you have a small amount of money the return from ordinary savings accounts is in real terms, negative.

new_investor?

It's not specifically property that I'm looking at investing in, just seeing what the different options are.


I know returns from savings accounts are poor but at least there isn't a risk of the actual sum invested being reduced if the value of shares etc falls. Not sure what sort of timescale I'm looking at yet.

dunstonh

new_investor? wrote: »

It's not specifically property that I'm looking at investing in, just seeing what the different options are.


I know returns from savings accounts are poor but at least there isn't a risk of the actual sum invested being reduced if the value of shares etc falls. Not sure what sort of timescale I'm looking at yet.

All risk based investments can and will fluctuate in value. Risk is not on/off. It is a sliding scale. There are around 30,000 options across the risk scale.

Cash doesnt have investment risk but it does have shortfall risk, inflation risk and provider risk. For long term, cash can actually be higher risk compared to investments when you consider all risks. No option is risk free totally.

AnotherJoe

new_investor? wrote: »

It's not specifically property that I'm looking at investing in, just seeing what the different options are.


I know returns from savings accounts are poor but at least there isn't a risk of the actual sum invested being reduced if the value of shares etc falls. Not sure what sort of timescale I'm looking at yet.

Then this is a pointless question.
Invest for short term and savings is the thing you want. For the longer term, a mixture of both shares /funds (e.g. Investments) and savings (e.g. Cash) increasing more towards investments the longer the term.

What long term / short term is, is somewhat subjective , I would say at least 5 years many would say 10.

If you are worried that your money invested might go down, which indeed it might, realise that in the long term, money in a savings account, (unless it's trivial amount on which you can get high interest), will absolutely go down in real terms, your money Ina savings for account for 20 years will with certainty, be worth less than now. That is very unlikely indeed with a global type fund.

TheFaithfulServant

Yes I was looking at the Zoopla thing as well and wanted some advice and comments, as I would like to invest in property but don't have enough capital to buy a property, so this seem a good option, and I don't have to manage it or have to pay tax on it.
Are the promises they are making false then?

I wasn't allowed to post a link , but if you go to Zoopla, you will see the it on the tab investment.

Thanks in advance