Bricklane.com's Property ISA

[d000hg]

As ISAs get more flexible, stuff like this are starting to crop up. I've said for ages that being able to invest in a share of a pool of properties could be great and as far as I can tell that's exactly what this is, within an ISA vehicle?

I haven't looked into it closely yet, has anyone here? The main benefits seem to be:
1)Tax - it's in an ISA
2)Tax - is the income for a company managing a large number of properties taxed less aggressively?
3)Spread your property investment among lots of places, not just 1 or 2 or 3 properties
4)You don't actually have the hassle of dealing with any properties

On the negative side someone is making money out of running the thing but possibly economies of scale offset it.

If others have looked into this or similar schemes please share your thoughts!

[_V_]

No notice period — exit by selling your shares to another investor

This reminds me of a timeshare. Great, then there's a property downturn, no one wants to buy and you are stuck with something you cannot sell.

What would £10,000 invested in a Property ISA 5 years ago be worth now?*

High St. Bank Cash ISA
£10,916
1.8% /year


Bricklane.com Property ISA
£13,713
6.5% /year
Capital at risk

Is that gain worth the extra risk?

I've not idea, since I don't know the risk.

[d000hg]

That's no different to investing in regular shares or in commodities, the value can go down.

I haven't checked yet, are these shares actually based on the tangible value of the assets or can they fluctuate wildly depending on trading activity?
The idea of owning 1/70th of 70 houses is attractive to me, the idea of owning shares in people's desire to own 1/70th of 70 houses is not; perhaps someone can tell me the proper terms to differentiate the two.

[_V_]

That's no different to investing in regular shares or in commodities, the value can go down.

I haven't checked yet, are these shares actually based on the tangible value of the assets or can they fluctuate wildly depending on trading activity?
The idea of owning 1/70th of 70 houses is attractive to me, the idea of owning shares in people's desire to own 1/70th of 70 houses is not; perhaps someone can tell me the proper terms to differentiate the two.

With most mainstream investment types (shares, funds, ETFs) there is plenty of liquidity and a centralised exchange. With this is it OTC trading? As you say how are the valuations calculated? It sounds like an OTC market, with all the caveats that entails...

[d000hg]

OTC?

I would imagine this is a long-term thing where you maybe can't guarantee to sell your shares at the drop of a hat? But then that's like owning an actual house I suppose... you can sit without tenants paying £hundreds a month.

6.5% is quite good I'd say, I think my Zopa is doing about the same though it's only been a few months so hard to be sure. If they got their act together for an ISA product I think that's where I'd be wanting to invest.

[_V_]

OTC?

.

Over the Counter. https://en.wikipedia.org/wiki/Over-t...nter_(finance))

i.e. You want to sell, you need to find a matching buyer, and the Bricklane company act as a broker and take a commission. If there are many more sellers than buyers, you might have a problem.

[tomtomagain]

From their site.

Simple, low fees
2% Platform fee + 0.85% Annual management fee

That's not low.

You could look at REIT's or a REIT ETF's for more diversification. I hold iShares IUKP which has returned around 50% since 2009 ( ~6.25% per year ) + dividends ( which was an additional 4.5% on my original investment last year ). Still fairly expensive at 0.4% management fee.

This is not a recommendation. Do your own research etc etc.