Jeff Mwaura No Comments

Investing In Property With Yielders

Several mainstream platforms have recently emerged offering investors small sums of capital opportunities to pool together their investments to gain a property one cannot afford alone. However, such platforms are not workable with sharia law owing to the debt they introduce into their offering. Today there’re several sharia-compliant property products including Yielders that fill this gap.

Yielders’ Islamic Finetech property platform offers investments from as little as £100 This allows a good chunk of the Muslim population to get involved in real estate investment opportunities without the burden of a mortgage or the hassle of being a landlord. In 2017, Yielders was the first Islamic Fintech platform to receive the Financial Conduct Authority (FCA) authorisation. This gave investors more assurance resulting in impressive quarterly growth in investment value with a 260% increase in Q2 and 137% in Q3.

Yielders Investment Opportunities

Yielders’ crowdfunding investment platform puts UK property investment within everyone’s reach. The platform retails pre-funded investments so that the assets can generate pre-defined rental incomes. This means investors can start earning returns within 30 days. Each property investment has a lifespan of 2 to 5 years. The Yielders UK team manages the entire investment process to maximise gains.

The investor benefits in three ways:

i). Zero leverage – Yielders team of legal experts consolidate the assets in an SPV structure.

ii). Prefunded assets – Before offering the property to the public, Yielders property sourcing team first acquires the assets.

iii). Fully integrated – Yielders have streamlined the process of investing in property straight from the comfort of your mobile devices.

How to Fund Your Yielders Account

Once you become an investor, you’ll receive an e-wallet which you can top up via a debit card or bank transfer. Transaction fees include:

  • Initial fee – 2.5 initial fee covers the cost of setting up the asset structures and administration costs of onboarding investors.
  • Management fees – 10% management fee of the gross rental income. This covers the ongoing costs of managing the investment company and its assets.
  • Profit share – 15% profit shared is tied to investor returns. Yielders will receive 15% of the capital appreciation when an asset sells at a profit at the end of the agreed investment period.

Risks to Investors

Investors’ main risks come with conventional crowdfunding which could hold up the investment process. Subsequent risks include the need to put tenants into place, adhere to set terms agreed, and the lack of an exit strategy.

Yielders’ business model mitigates such risks by pre-funding assets. This gives an added layer of security and pre-defined rental agreements. This allows Yielders to minimise voids while maximising returns. All in all, investors are already aware of expected returns before they invest. Furthermore, Yielders has a secondary market which allows assets to be re-listed giving investors complete control of their funds.

Yielders offers a great platform for the Muslim population who lack enough cash or time to buy and own property. Though not as liquid as other investment options, this investment is ideal for people looking to invest for the next 3 to 5 years. In general, Yielders is a robust property investment platform that is beneficial to the UK Islamic market.

Jeff Mwaura No Comments

How To Invest In Property With Brickowner

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 Fees

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.

Pros

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

Cons

  • 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.