£30K Buy to Let Syndicate Investment

cellwood

Howdy to all!

Having been in the house rental market for 10 years it is beginning to be tiresome so looking now at mortgage options. It seems crazy that in a booming property market investors with upto £50k to invest in a secure scheme are left scratching their heads while there are thousands of hard working families and couples in need of housing. Here is a no brainer idea of mine that I would like your opinion on please so I can find the cracks.

Quite simple, for example 10 investors join to buy a £300k property @ £30k each. The property is let @ £800 p/m (low rent example) which nets each investor £1000 cash return each year. The property is then sold after 8-10 years to return the investors original amount plus bonus share in the properties price increase.

So the basic return is around 3.2% , totally secure, option to buy out other shareholders, dweller can buy in and bonus at the end. Whats the down side to this? It is basically mini buy to let investment.

thanks
Chris

Tom99

[FONT=Verdana, sans-serif]In theory it sound a good idea but there are many downsides, liquidity being the main one. You would have to do it through a company structure rather than individual owners.[/FONT]
[FONT=Verdana, sans-serif]The idea is not new as others are trying to set up something similar for example:

[/FONT] [FONT=Verdana, sans-serif]http://www.thisismoney.co.uk/money/buytolet/article-4589230/Property-Partner-s-stock-exchange-buy-let-companies.html[/FONT]

dealer_wins

One potential problem would be nightmare tenants!

PeacefulWaters

Property prices aren't guaranteed to increase.

The area where a property is owned may become undesirable.

The moment of sale might be dragged out for months if there's a market slump.

Tenants might be a pain.

Past performance is not a guarantee of "totally secure" investing.

PasturesNew

You're not housing anybody unless you're CREATING homes.

A house exists, it can be bought by: "people awash with cash, to rent it out", or, "people who CAN afford to buy a home to live in".

Don't think you're doing anybody a favour, nor housing anybody, unless you're starting with a bare piece of land and laying those bricks down.

Create, don't hijack.

firestone

with over £100 million and houses/flats of about 700 units think Property Partner have already got enough of the market to stop new players.Only thing is apart from their secondary market is the vote to sell or retain every 5 years which may not be what you want at that time.

elephantrosie

i would not want to buy a property with another person, let alone someone i do not know.
what happened if i passed away? how easy it is to pass my share of property to my beneficiary, if there are 4 other investors who owned the property?
less than 4% ROI a year? well.... nationwide, hsbc, first direct, marks and spencer offer higher interest rate at zero risks.
do not forget about maintainence. so i earn less than 4% pa and now i have to pay like a few hundreds for maintainence? no thanks. i may as well keep the money under my bed.

firestone

elephantrosie wrote: »

i would not want to buy a property with another person, let alone someone i do not know.
what happened if i passed away? how easy it is to pass my share of property to my beneficiary, if there are 4 other investors who owned the property?
less than 4% ROI a year? well.... nationwide, hsbc, first direct, marks and spencer offer higher interest rate at zero risks.
do not forget about maintainence. so i earn less than 4% pa and now i have to pay like a few hundreds for maintainence? no thanks. i may as well keep the money under my bed.

But can you sleep with your nose touching the ceiling?:)