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Post by valueinvestor123 on Feb 5, 2015 3:36:02 GMT
Is there much to choose from between property moose and crowd house? (which is bigger?)
Any idea what the annual returns are likely to be? 6% yield plus house price appreciation, I see the total returns unlikely to break 10%.
I have studied the websites but it seems very hard to work out a likely return without actually signing up and doing it..and then going back in time...
Some satisfied or dissatisfied customers' care to comment?
Also, I struggle to understand: why not invest in REITs or offshore-registered property companies instead?
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bigfoot12
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Post by bigfoot12 on Feb 5, 2015 9:17:06 GMT
I haven't done anything with property moose, but I did try the house crowd (THC) out a year or so ago. I have just received my first dividend which I am relieved about.
At the time my reason for investing was that I thought THC would be less correlated to the stock market than a REIT would be, the refurbishment of the properties would give an uplift in value, and that the properties were unlike any in a REIT I had seen with a 10% gross rental yield.
I still think that these three are probably true, but I now understand the charges better than I did and overall I no longer think that it is worth it. I haven't invested in one for over a year. They have changed the terms a few times since then and I would need to read them again to understand the current terms. However in that year there have been some offers that have been interesting. It would be possible to build a diverse portfolio with them, albeit concentrated around Manchester.
My first look at Property Moose showed me investments lasting two years. With the high up front and unwinding costs, two years seems too short for me.
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surby
Minor shareholder in Assetz Capital
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Post by surby on Feb 5, 2015 13:24:00 GMT
I've invested in almost all of the properties offered by Property Moose since its launch last Summer. Most of these have been residential buy to let, but one had a commercial lease too. Rental yields have varied from 5.6 - 7.0% and are paid monthly into your PM account. Total projected returns for the two year projects offered to date have ranged from 19% to 34% after providing for all expected costs and tax in the SPV. There is no further tax for basic rate taxpayers to pay.
Hope that helps.
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ejohn
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Post by ejohn on Feb 11, 2015 21:17:46 GMT
I have invested in the House crowd, in their earlier days. They have now bought over 100 houses. I don't think they have sold many, but that may depend on what they buy rising 25% before they considered selling, which I think was one of the trigger points (will need to check). It is only when a few sales are complete that we can understand what the real return has been. There is no guarantee anyone investing now would get the same amount as interest rates could change etc.
The housecrowd has been basically a play on Manchester property, They are beginning to branch out a bit now. My slight worry is that they may overstretch themselves and not keep sufficient eyes on the properties they have already sold to investors. Their systems of raising money, refurbishing and putting in tenants seems fine, but the sales end is realtively untested. Time will no doubt tell.
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ejohn
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Post by ejohn on Feb 11, 2015 21:33:13 GMT
Also, I struggle to understand: why not invest in REITs or offshore-registered property companies instead? Reits - Real Etate Investment Trusts - are shares which can trade at more than the asset values of the properties they hold (a premium) or trade at at less than the asset value of the properties they hold (a discount). Most REITs are now trading at a premium, some a very high premium (10-20%) and could be considered as to expensive to buy at the moment. When they trade at a discount, you get much better value for your money. The House crowd model trades at the asset value of the actual property and you do not have to pay a premium to buy it. So arguably a cheaper approach at the current time. Where REITS do score is in diversifying their holding. To match them you would have to invest in several houses. Before investing in REITS, I have always found it useful to read the last annual reports. Not only tells you the assets they are invested in, the Chairmans outlook also tells you, if you read it carefully, what he or she thinks will happen to the asset values over the forthcoming year. Hope that helps
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bigfoot12
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Post by bigfoot12 on Feb 11, 2015 23:02:24 GMT
Most REITs are now trading at a premium, some a very high premium (10-20%) and could be considered as to expensive to buy at the moment. When they trade at a discount, you get much better value for your money. The House crowd model trades at the asset value of the actual property and you do not have to pay a premium to buy it. So arguably a cheaper approach at the current time. Where REITS do score is in diversifying their holding. To match them you would have to invest in several houses. Before investing in REITS, I have always found it useful to read the last annual reports. Not only tells you the assets they are invested in, the Chairmans outlook also tells you, if you read it carefully, what he or she thinks will happen to the asset values over the forthcoming year. I agree that QE has sent lots of valuations too high, and it is good advice to look at the Chairman's statement. I will remember that next time. I'm not sure that House crowd trades at the actual value, there is a sizable up front charge/reserve which is similar to a premium.
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j
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Post by j on Feb 12, 2015 18:10:08 GMT
I've invested in almost all of the properties offered by Property Moose since its launch last Summer. Most of these have been residential buy to let, but one had a commercial lease too. Rental yields have varied from 5.6 - 7.0% and are paid monthly into your PM account. Total projected returns for the two year projects offered to date have ranged from 19% to 34% after providing for all expected costs and tax in the SPV. There is no further tax for basic rate taxpayers to pay. Hope that helps. I assume you mean19-34% over the 2 yr period not pa? I found the fact they do not give a pa return a little unhelpful to the uninitiated (eg say rental yield is 4% pa, they add 8% to anticipated yield) Their fees are too high imho too. THC I believe have reduced their fees a few months ago, are too concentrated in MAnchester but have started slowly branching out. WOuld be interesting to see how both pan out in 2-5 yrs' times
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surby
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Post by surby on Feb 16, 2015 2:51:36 GMT
Correct, the total returns over two years quoted above are not annual (nor did I say they were).
PM also divides the forecasts by two to quote effective annual returns of 9.5-17% with a view to ensuring no misunderstandings. The actual return is not paid annually, however. It is paid as monthly rental and a final capital uplift when the property is sold.
For example. 7% per annum rental income for years one and two (=14% total) plus a 20% projected uplift at end of year two when the property is sold is equivalent to a simple projected return of 34% if the sale occurs exactly on the two year mark. If you reinvest the rental income, or put it on deposit you could make slightly more of course.
These figures already take account of all PM charges, sale fees and corporation tax, so there is a risk of double counting if you say their fees are high. Basic rate taxpayers should not have any further liability as highlighted elsewhere. HTH.
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Post by longjohn on Feb 17, 2015 12:05:23 GMT
Also, I struggle to understand: why not invest in REITs or offshore-registered property companies instead? Reits - Real Etate Investment Trusts - are shares which can trade at more than the asset values of the properties they hold (a premium) or trade at at less than the asset value of the properties they hold (a discount). Most REITs are now trading at a premium, some a very high premium (10-20%) and could be considered as to expensive to buy at the moment. When they trade at a discount, you get much better value for your money. The House crowd model trades at the asset value of the actual property and you do not have to pay a premium to buy it. So arguably a cheaper approach at the current time. Where REITS do score is in diversifying their holding. To match them you would have to invest in several houses. Before investing in REITS, I have always found it useful to read the last annual reports. Not only tells you the assets they are invested in, the Chairmans outlook also tells you, if you read it carefully, what he or she thinks will happen to the asset values over the forthcoming year. Hope that helps There are dozens of REIT's to choose from. They vary from huge generalists investing in flats, houses and offices down to small specialists with a specific purpose. I own shares in two of these. The first is Primary Health Properties (PHP). This one only builds or buys medical centres and doctors surgeries. Rent is paid by the NHS so pretty safe. The next is Town Centre Securities (TCS). This one owns Leeds central shopping centre and a whole lot of car parks. I like car parks. They're never empty, the motorist always pays and there's nothing much to go wrong. As with all investments research is key. Know what you are getting into and why you want it. John
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