I haven’t written anything about my real estate crowdfunding portfolio since July. Enough changes happened in between, so I’m ready to provide new updates.
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Property Partner is a real-estate crowd investing company based in the UK that buys and rent real estate properties. You buy shares in a property that the platform either already owns or plans to buy. Later, you receive a share of the rental income in the form of a monthly dividend.
Each property is listed on the website with a projected dividend yield to help you estimate your returns.
I kept adding small sums in the past half a year and invested in almost all new properties listed on the platform.
I receive around 5 GBP rental dividends each month. Unfortunately, since August, Property Partner decided to add lots of additional fees and I’m not really happy with my current portfolio performance. I should either invest more, in order to absorb the new fees or fully withdraw from the platform and move the funds to a different place.
Anyone in the world (except US residents) can open an account with Property Partner. To add funds, you’ll need to validate your identity using your passport or driving license.
You’ll also need to provide a proof of address: a utility bill, bank or tax statement. Their verification process is not automated, so you’ll need to email these documents to them and then wait for their reply.
The minimum deposit – if you choose to add funds through a debit card – is 250 GBP. If you fund your account through a bank transfer, I don’t think there’s a minimum limit.
I’m not ready yet to invest 250 GBP in a single investment, so I don’t use yet the debit card transfer. Instead, I transfer money through bank transfer from my Revolut account, and it usually takes only a couple of hours.
You can choose to buy any amount of shares from the properties available. Some shares are priced at 1 GBP, so you can diversify your portfolio even if you start with a small investment.
Property Partner offers 3 types of real estate properties to invest in:
Property Partner uses a 2% fee on any investment you make on the platform. In addition, you pay a monthly 1 GBP fee and a 1% annual fee on all your assets.
You have an exit option after 5 years of investment, and the platform will buy back your investment from you at market price. If you don’t want to wait 5 years until you exit, you can sell your investment on the secondary market to other investors.
The properties valuation is updated every quarter from independent, accredited surveyor valuations.
Each month on the 5th you’ll receive dividends based on the rental income of the property after the property costs have been subtracted from it (mortgage costs if any, maintenance, etc.).
You can choose from 3 standard investing plans: income, balanced or growth plan. The minimum amount to invest in any of these plans if 1000 GBP.
Each one of these come with different levels of risk and focuses on different metrics.
The income plan contains properties with high rental income.
The balanced plan aims for a stronger total return by combining rental income and potential market appreciation of the properties.
The growth plan only focuses on properties that have a high potential capital gain.
The plans also have some diversification rules in order to protect your investment:
This is for investors that don’t like the auto-invest feature Property Partner is offering. You can browse through the available properties and pick the ones you like most.
Each property has details containing the due diligence report, projected annual return, the plans for the property bought and many other details. I can’t say I know that much about the real estate market, so I’ll stick for now with the predefined investment plans.
You can buy or sell shares of the properties on the platform on the Resale Market. It looks like a real-estate stock exchange.
You’ll need to pay the same 2% fee when buying properties on the Resale Market, but there’s no fee when selling your shares.
This is a good place to exit your investment earlier for whatever reason you’d have. You can set any price on the shares you list, but there’s no guarantee you’ll find a buyer.
Once you’ve listed your property for sale, you can view it on your Dashboard, on the Investments for Sale tab.
One thing to mention is that you’ll continue to receive dividends from rental income during the time your investment is on sale on the Resale Market.
This is a feature Property Partner added recently. On the 5th of each month you receive dividends on the properties you invested in. You can choose to reinvest these dividends and let Property Partner buy more shares of the properties you’re invested in from the Resale Market.
It’s a good way to automate the growth of your portfolio and also Property Partner will buy the shares on the market at the lowest price available. Additionally, it will make sure the prices are not much higher than the 30-day average, to make sure other investors are not inflating the prices just because they know there’s going to be some automatic buying each 5th of the month.
I’m not entirely convinced by this feature, and for now, I’ll be choosing to invest manually on the resale market, but I’ll keep an eye on it.
On each property you invested in there’s an opportunity every 5 years to exit your investment. The shareholders that wish to exit your investment will be aggregated in a group by Property Partner, and their shares will be relisted at the current valuation on the platform.
If the property is not sold on the platform for whatever reason, Property Partner will start selling the property on the open market. If the sale is successful, all investors in the property will be exited and the profit will be split among all investors.
Up until August 2019, fees on Property Partner were manageable, even if you wanted to invest only small sums. The only fee you were paying was 2%fee on investing in a new property. Since August, there’s an extra 1% annual fee for all the investments you have on the platform, plus an additional 1 GBP monthly fee for all investors.
Given these new fees, any investment on Property Partner smaller than a few thousand GBP wouldn’t make sense.
Property Partner is a good option if you want to invest in the real estate market but you don’t have the capital to buy your own property.
However, due to the many fees the platform has, you need to invest pretty large sums in order to make a profit.
The resale market is an interesting option to consider. It looks like a stock exchange for real estate and it’s an easy way to diversify your portfolio without waiting for more new properties to be listed on the platform.
You can choose to reinvest your monthly dividends in the properties you’re already invested in, and this is a nice way to automate your portfolio growth.
The company focuses on 2 directions: long-term returns generated by rent and short-term returns caused by market appreciation. You can choose the properties or investment plans that best suit your investor profile.