- New app allows investors to be part-owners of a portfolio of rental homes
- Investors can earn rental profits as if they had bought the property themselves
- If the assets increase in value, the value of their shares also increases.
- Rob Bynes and Rob Dix, creators of The Property Podcast are behind the app
Nowadays there are mobile apps to manage our savings and bank accounts, to invest in stocks and shares, and even to dabble in cryptocurrencies.
We may also soon have an app for investing in buy-to-let, as the duo behind a popular podcast prepare to launch their fractional asset investment proposition later this month.
Manchester-based property landlords, Rob Bynes and Rob Dix, are launching a new app called portfolio Which will enable investors to become part-owners in a portfolio of rental homes.
Rob Baines and Rob Dix are co-founders of Property Hub and producers of The Property Podcast
Pair, Joe. is co-founder of property hub And property podcastLet’s say people will be able to invest with just a few clicks – by giving them a share of the rental profit and potential home value gain.
The app, which launched on 4 November, claims that investors get the benefit of diversifying their investments across different homes across the UK at a much lower cost than buying a single buy-to-let – though they still have to Stump up will need to be a minimum of £10,000.
“The portfolio has taken many years to build,” says Bynes. ‘We wanted to make property investing accessible to those who lacked the time, money or confidence to invest in a more traditional way.’
This can be an opportunity for landlords to dip their toe into property ownership without such a huge financial or time commitment.
It also means they won’t personally feel the effects of some of the more punitive tax measures imposed on buy-to-let landlords in recent years, such as a 3 percent stamp duty surcharge on purchases and offsetting mortgage interest. Inability to earn rental income to reduce their tax bill.
But the portfolio will choose and manage the homes, which means that buyers will have less control over their investments — and similar buy-to-let co-investment plans have run into issues in the past when too many investors have invested in the same amount. Tried to leave the bar. .
It’s money that digs into the details on the Portfolio app, and asks whether partial asset ownership plans are worth the money.
How does this work?
The portfolio is structured as a real estate investment trust (REIT).
A REIT is a company listed on a stock exchange established for the purpose of owning and renting assets to generate returns for its shareholders.
To qualify as a REIT, a fund must pay 90 percent of its rental income to its investors through dividends.
REITs are tax-efficient structures that are not taxed corporation tax on any profit, whether from rental income or the sale of its properties.
Investors will be able to buy shares in the portfolio, which is listed on the International Stock Exchange.
The value of each individual share in the fund will be determined by the total net worth of the fund’s assets — which are primarily made up of the assets it holds.
The Portfolio app is currently in testing but the waiting list to join is open.
To ascertain the value of assets, and therefore stocks, all assets within the portfolio will be assessed every three months by an independent RICS appraiser.
If the value of the fund’s assets increases after an investor buys them, they will make a paper profit that they can realize by selling some or all of their investments.
Rob Dix says: ‘We chose this structure because it is mainstream and it allows anyone to invest.
‘As an investor you are exposed to the performance of all assets within the portfolio, so you effectively qualify for the portion of the income that pays all assets and if the assets increase in value your The share gets bigger.
‘It also gives investors maximum diversification and removes the need for expert knowledge to identify an asset that they believe will perform best.’
How will the portfolio differ from other residential property funds?
According to Moneyfacts.co.uk, there are over 50 REITs listed on the London Stock Exchange, with a combined value of around £54 billion – as well as many others that are listed elsewhere like the portfolio.
Most REITs in the UK focus on commercial property, such as offices or shopping centres.
Some of the biggest examples of the London Stock Exchange include British Land, Land Securities and Hammerson, which generate returns from the rent that companies and retailers pay when they lease that space to them.
But there are other notable REITs with a residential focus, such as Residential Safe Income Plc, as well as unlisted funds, such as L1 Capital’s UK Residential Property Fund, which is rumored to be considering a London listing, and Hearthstone Investments’ TM domestic investor. Fund.
Baines and Dix believe that a major drawback with other forms of non-direct property investing is that they do not have a solid sense of ownership, which they feel allows people to buy rather than as an alternative investment. attracts to.
REITs are tax efficient structures that are not taxed corporation tax on any profits, whether from rental income or the sale of its properties.
Portfolio will provide video tours and frequent updates of properties through the app.
Dix says: ‘Ensuring that investors have all the excitement and pride that come with being a property investor was a really important factor when we were developing the app.
‘It was looking for a way to allow for a more traditional investment experience, but without the hassle of owning assets.
‘With the financial benefits – rental income and potential capital growth – portfolio investors will receive video …