Do You Have to Buy to Invest in Property?
Property is often considered to be one of the more traditional entities to invest your money into.
However, for some investors putting down a deposit or signing up for a mortgage is goal. Fortunately, there are a number of ways investors can syphon their money into property without having to go through the long buying process.
Crowdfunding and commercial properties
Whilst Brexit has caused uncertainty, particularly with tax rules, many investors are putting their money into co-working spaces, care homes and student housing. These types of investment properties typically have high yields and often bypass tax reforms.
Many UK crowdfunding platforms operate online, allowing potential investors to peruse countless different opportunities, including property. Businesses requiring capital simply create an online campaign. The majority of crowdfunding companies offer investors the chance to invest in return for a small equity share. However, there is scope for larger returns if the company expands or is bought out.
Invest in Real Estate Investment Trusts
Abbreviated to REIT, a Real Estate Investment Trust is a closed-ended publicly traded company that provides investors with tax efficient investment exposure. The types of property generally invested in tend to be commercial and range from office buildings and retail spaces to flats and holiday resorts.
They are considered a concrete investment for individuals thinking about their financial futures because they are high-yielding; REITS are required to pay out 90% of their income. Furthermore, with companies under long-term contracts the income is predictable and consistent for property investors.
Property funds
During the aftermath of the Brexit vote many commercial property fund companies were forced to halt withdrawals. However, in 2017 the sector became prosperous once again and many leading organisations have returned to their former levels without investors missing out.
Investors of property funds make lump-sum investments which are pooled together and used to purchase a range of assets. Property funds tend to operate in two different ways. Some invest directly into commercial property, meaning funds are used to buy physical properties. Other invest indirectly by purchasing shares in property companies or other property funds.
Property bonds
Another more traditional investment route, comes in the form of property bonds. Alternative finance providers offer investors the opportunity to support the development of residential and commercial properties. Given the current housing deficit in the UK, this investment route enables investors to support the development of homes and receive an attractive return on their investment. Wellesley is an established alternative property finance firm dedicated to offering investors attractive interest rates of up to 6.00% per annum gross, whilst simultaneously providing financing to experienced developers within the UK residential property market.
Investors can apply for, access and manage their Wellesley Property Mini-Bond accounts online. The Bond is an ideal choice for an investor seeking a fixed secured investment with regular interest payments.
It is important to remember that as with most investments, there is a risk to your capital and interest, despite the security arrangements in place.
+ Find out more about Wellesley
The Wellesley Property Mini-Bonds are issued by Wellesley Finance Plc. Your capital is at risk and interest payments are not guaranteed. Investment is not covered by the Financial Service Compensation Scheme (FSCS). The Property Mini-Bond is non-transferable and cannot be held within an ISA account. To view the full risk statement click here.
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