Social housing

ahai1

Hi is this a good ethical investment? http://www.crowdfunder.co.uk/crowdfunding-affordable-rented-homes-1/?

System

Not if you want to make money. The returns are laughable. They're planning on spending £1Bn to build just 6000 homes which makes each property £166,000 which is mad. They're then planning a rental price of 35% of the average local income for the area the houses are in. That could end up being as little as £500 a month. A typical 25 year repayment mortgage for £166,000 being repaid at £500pcm would actually work out as a NEGATIVE interest rate (i.e your investment is LOSING value) and that is even before all the downsides of letting are brought into play such as void periods, unpaid rent, damage, property repairs.

If you want to set fire to money this is the way to do it. If you actually wanted to make more money than this you could stick it in a Natwest current account paying just 0.1% interest.

Owain_Moneysaver

Tarambor wrote: »

... each property £166,000 ... as little as £500 a month.

You'd be better buying 3 ex council places for £50k each and renting them out for £500 pcm.

greatkingrat

That link is from 2015 and they raised the grand total of £337 so I think it is safe to say the project is dead.