How to invest in social housing?

UncleK

Here's one offering 20% returns on Linkedin theuniquepropertygroup - as people have said - be very very careful.

masonic

UncleK said:

Here's one offering 20% returns on Linkedin theuniquepropertygroup - as people have said - be very very careful.

looks very scammy, I found the section towards the bottom of the page particularly compelling:

[Deleted User]

Careful where you invest read an article on City AM about Home REIT, Home REIT properties lose almost 60% of their value

 

https://www.cityam.com/home-reit-investors-move-to-sue-the-firm-after-portfolio-craters-in-value/

 

https://www.insidehousing.co.uk/news/home-reit-properties-lose-almost-60-of-their-value-84510

 

 

jimjames

MartaUK said:

that's why I am cautiously interested in what those companies offer. Just I do not know how to vet them, if they even do what they say on the website.

You have a lot less diversification if you only own 1 property or part of it. If you are considering then you should get independent advice (valuation/solicitor etc) on the value and business model as well as making sure you are the owner and any restrictions. Don't just rely on the company/website to give you information. Storage pod owners found that they owned the unit but were liable for ongoing fees even when they were not being rented out which drained their money.
Also make sure that you understand what you are getting - is it actually part or all of a property or are you lending money to the company and will only have that loan used to pay income to you? Unless you are buying a place yourself there are so many traps and costs that I wouldn't bother. The one I saw that guaranteed 10% income just make me think scam because you can't guarantee income on a single property with variables like tenants and costs.

Malthusian

MartaUK said:

Thank you all for your input. Yes, I see REITs and things like this are quite complex investments with rather unpredictable profits (unless you're really good at understanding these things, which I'm not). That is why I was looking for something simpler, like I buy a share of a house and a company managing it pays me my share of the profits from rent/lease. 

That isn't a simple investment. How do you get your money back if you want it out?

How does social housing, which by definition charges its tenants low rents, result in a high ROI?

None of those questions have simple answers.

In any case it isn't even what actually happens with this kind of "opportunity". It's not "buying a share of a house" - that would involve hiring a conveyancer, a valuer, etc, in conjunction with your co-investors. What actually happens is that you lend some money to a company nobody has ever heard of. You might get some of it paid back to you for a brief period. Then the rest of it disappears. Simple in a way but it doesn't make for a simple life.

tichtich

Any scheme that claims a 10% 'guaranteed' return sounds scammy to me. If such an investment opportunity really existed, why would anyone buy government bonds at 4%?

For what it's worth, I own shares in Residential Secure Income REIT (RESI). The expected forward yield is about 7%. But of course that's not guaranteed. (You might say that putting 'Secure Income' in the name seems a bit scammy!) Like many REITs, its price has fallen a long way from its peak, because of the rise of interest rates. But I bought it fairly recently, after most of that drop. What attracted me to RESI (the only REIT I own) is that most of its debt has a very long term with either fixed interest rate or low-coupon index-linked.