I’m a simple guy so I like to see some numbers to make things practicable and see if I understand it correctly…
Let say I invest £1000 in
57 BEECHWOOD MOUNT, LEEDS
It is currently valued at £198,885.00
It seems that 1 share is £1
So I’ll get 1000 shares.
Further we know:
The site mentions for #57, the net rental yield is 7%
So total rent income (for investors) was 7% of £198,885 = £13921,95
The faq mentions:
There’s an annual 0.5% fee on the value of a property. This comes out of any money made from renting it. This fee covers the on-going admin costs of keeping UOWN awesome, property valuations and other exciting jobs like filing annual tax returns
So 0,5% of £198,885 is £994,43
That comes from the rental so total rent paid was £13921,95 + £994,43 = £ 14916,38
Next from the faq:
The properties are managed by third party management agents who charge 10% + VAT fee on rental payments
I don’t live in the uk so I assume the vat is 20% (?)
So the total rent was higher so that when we take of the 10% + VAT fee we get the £ 14916,38
That would make the total rent paid £ 16,950.43 (or £1412 per month. I have no idea about rental prices of this kind of rental properties in Leeds, perhaps somebody can letme know if that could be right…)
So to put it in normal order:
Total rent collected: £ 16,950.43 / year
10% + 20%vat for third party management = - £2034,05 / year
0,5% of property for UOwn = - £994,43
Net rent for investors = £13921,95
Shares 198,885 so £0,07 / share
For the £1000 invested that is 7% as stated on the site
A few questions (I guess for uown to answer but feel free…):
1) Is the above correct?
2) How often are the properties revaluated? Which would mean that if prices go up shares go up and new investors will get less shares / £
3) And as asked above, what about rental prices? How are they set? What strategy is followed? Are they linked to the property value? So in the case of a housing market crash, will investors get less rent money?
4) If the market goes down, that means UOwn will get less for its properties, is UOwn committed to this? Assume a worst case scenario, if the uk housing market collapses with 50% will UOwn rise its % to cover it cost or as stated will it accept lower income? Eg “property valuations and other exciting jobs like filing annual tax returns.” will not go down
5) Are there or will there be any official statements so investors can check those numbers (like above?) if I play the devil’s advocate, it could be that UOwn charges far more rent but simply tells investors other numbers, is there an official way to check?…
6) Does anybody know if £2034,05 / year for keeping the place in good shape/management is a reasonable amount for a property like this?
7) if i'm correct, since feb. this year, there are 3 properties on the site. how does this business model/p2p site work? will more properties added? and where is the money coming from to do that?
8) for those of you who invested, are you happy with it?
9) why is the current owner selling its properties?
(expecting a housing market crash?