PROPERTY INVESTMENT CLUBS

 

 In summery these clubs are known as a property investment club, buy to let scheme, buy to let schemes or syndicates. The scheme allows the members to invest in the property in the UK market if it is a UK focused investment club or sometimes in properties abroad if it offers this as a part of the investment profile. These clubs offer

1.       Pooling of resources to allow collective management and ownership of investment property

2.       Much or all of the property being financed by the members of the scheme, usually 15% equity and 85% debt, the property investment club will be linked to brokers and lenders so they will usually arrange the finance for the member.

3.       A lot of property clubs offer educational training on investing in the property market

4.       Other help like , finding a conveyancer or recommending conveyancer they are linked with , sale of the property , creating tenancy agreements , finding tenants etc through their network of people they are connected with .

5.       Some property clubs work with developers of new properties, and you might be given early access to new developments etc .

Property clubs are regulated by the FCA , the regulation governs promotion of the investment club and how they collect any fee levied .

Collective investment schemes

Broadly speaking, a collective investment scheme is any arrangement:

 

1.       The purpose or effect of which is to enable those taking part ( either by owning the property , or part of it , or otherwise ) to participate in or receive profits or an income arising from  the acquisition , holding, management or disposal of the property :

2.       Where people who take part, do not have day to day control over the management of the property.

3.       Where either the contributions and profits or income are pooled, or the property is managed as a whole by or on behalf of the operator of the scheme or both.

Advantages and disadvantages of property investment clubs.

Pros of Investment Clubs

• Pooling resources with others can make buying possible for some who might not be able to invest otherwise. 
• Some clubs offer learning opportunities, bringing in knowledgeable speakers and organizing group attendance at conferences. 
• The tasks inherent in investing in real estate can be spread out to different members so no one gets overwhelmed.

 

 

Cons of Investment Clubs

• Emotions can get involved when you're dealing with several different personalities, and emotion shouldn't play a role in investing.
• Some clubs require pricey membership fees, and these costs can ultimately cut into your returns.
• You might not be able to easily get your money out if you need to do so because of an emergency.