From one end of the scale to the other, what are investors and landlords “property development” options?
Here are a few alternative buy to let options that are linked to property development, for the more hassle-free, hands-off investor or landlord looking to diversify.
Peer to Peer lending (P2P) – a simple way to invest in property with a low entry starting point. Investors lend money to borrowers with cash secured against residential or commercial properties. There are several UK secured lending platforms, starting from £500.
Crowdfunding – it differs from peer to peer in that you can get a stake in the property and a return on the capital growth and rental return income. Innovative Isa’s or IF Isa’s are offered by P2P and Crowdfunding platforms and investors can benefit from tax-free interest and tax-free capital gains on their annual Isa £20k allowance.
Property Loan Note – This is one of my personal favourites, however, you do need to register as a HNWI or sophisticated investor. You buy loan notes of £1k each, min £5k entry, and the money is used for a project or projects. Godwin Capital have one of the most attractive loan notes on the market due to their defensive asset class portfolio.
Property Funds – an option to test the water of the housing market. You can invest small amounts and spread your risk across several properties.
Similarly there is Developer Finance and Debt Finance schemes that investors can also look into, but the reason many of these products fall under the section 21 and need a registration for an individual to be a Restricted Investor at the very least, is because your money is not protected and property loans, even when secured against assets, doesn’t provide full protection.