Founded in January 2017, Brickowner is a newcomer in the UK property crowdfunding market. As an aggregator, Brickowner can combine several investors investing smaller amounts, and pool a substantial amount to invest with an institutional asset manager. In simple terms, Brickowner gathers money from different investors and collaborating with established UK property asset managers, they use the funds to buy the physical property.
How Does Brickowner Work?
For every property Brickowner advertises on its website, there’s a set amount to raise which includes the acquisition cost and any other associated costs such as stamp duty and surveyors fees. After researching each property, the forecasted financials including rental yields estimates and projected returns for the 2 to 3 years it holds the property are given. This will allow you to gauge different properties against each other.
The beauty of crowdfunding is you can buy property without any bank help. Brickowner takes care of your investment once the property is fully funded. The company buys shares in the investment via a property manager and takes care of any investment maintenance including legal paperwork.
If you wish to exit the investment after the minimum period lapses, Brickowner will do it on your behalf. This function is ideal for investors with little understanding of property management. Another good thing about Brickowner is that you can sell your stake in a property before the investment period lapses.
Brickowner charges two fees:
- 3% Fundraising Fee – Fundraising fee is a one-off fee at the point of investment. It covers the use of Brickowner technology. The fee applies to investors buying newly listed properties as well as those that buy shares on the secondary market.
- 1% annual management fee – This a monthly fee paid from the SPV.
Is it Safe to Invest in Brickowner?
In general, no crowdfunding investment is 100% safe. In Brickowner’s case, they give investors peace of mind by ring-fencing investments for added protection. The Financial Conduct Authority also regulates Brickowner.
By using Single Purpose Vehicle for each property purchase, you cannot lose your investment in case Brickowner goes bankrupt for whatever reason. This is because your investment is in the actual physical property and is separate from the website or other properties Brickowner has bought.
There’s further protection incase Brickowner were to go bust after raising funds but have not yet purchased a property. This is because investors’ money doesn’t go to Brickowner’s bank account but to a solicitor’s ‘ring-fenced’ account.
One of the main advantages of investing in Brickowner is that small investors get the opportunity to invest in big building projects with forecasted higher returns. Other benefits include:
- Investments can start with as little as £100
- Investments are ring-fenced in a separate UK limited company
- The platform is easy to use for beginners
- No exit fees when investment term ends
- No rising interest rates associated with banks or building societies
- Your cash is locked in a fixed term and no opportunity to resell your shares
- Whether an investment is profitable or not, you have to pay the fees.
As the positives far outweigh the negatives, Brickowner seems like a decent platform to invest in. They offer a great option to diversify your investments once you join the bandwagon of property investors.