Increasing Appeal as Regards to Peer-to-Peer Property Lending.
Property as been studied to be one of the most valuable form of asset one can ever get, and this is simply because it is a kind of asset that doesnt in any way lose it value instead it keep on increasing as much as it exists.
How ever there are many who are not able to acquire this form of asset because it required alot of capital to acquire a property becuse of the high investment threshold and the buy to let market is not in anyway assessible for some and is in this case that the peer to peer form of lending and property investment comes into play as a big time alternative to buy-to-let.
You can start with about $1000 but this depends on the kind of platform and how big or small you intend to start the business.
The more risk you are willing to take will determine the kind of profit you will probably make from this. It have a very high interest turn up of about 10 percent annually and in this peer to peer lending, you do not need to go through any form of stress of trying to look for tenants or paying any form of agent fees or going through any management stress and so on.
Just like every other businesses that are available everywhere, this Peer to Peer lending also comes with its own business risk warnings and this is the reason why you need to do alot of personal research and enquiries and be able to assess the best available options with regards to the business. Amd that is why you will decide on which Type of the Peer to Peer lending you will be interested in after going through them in details before you get start the business, you should be very sure of what you are going for.
Property to Peer-to-Peer lending have makes it possible for lenders that are seeking investment returns make loans to borrowers that are willing to buy or develop property, and for about a week now, the company have come under a spotlight following some kind of legal issues
Now we can discuss the types of Peer to peer lender options that we have, so that you can decide on what you can go for;
1. Bridging Loan This is a kind of short term loans that are being given out to people who are interested in the funded property like the homeowners and property developer as well. This is very appealing to most borrowers because it makes them jump alot of protocols and other forms of financial formalties like those traditional commercial banks, and this will make borrowers to go for this this intead.
As we have said, it is a very short term loans, that last upto like three months in some instances, this loans help those investors who want to be able to make faster money, and when the loans are repayed faster, it makes it possible for the borrower to get to borrow more because if the borrowers are not able to pay early, it may likely block there chance of getting such loans in the future as the loan is usually dependent on whether the loan payment is made faster or not. Also because of the high shortage of housing in the U.K, there is requirements for enough funds to finance projects, and therefore this Bridging loan helps the investors also to be able to contribute towards the housing development through lending and also making there earnings in the process as well, therefore, before you part away with your money, you should be sure that you are lending to a very reputable contractor that have registration with every appropriate authority.
2. Innovative Finance ISA
This Innovative finance ISA provides and a sort of tax free loan investment in Peer to peer lending and even though it just started in less than 3 years ago to this time, i has been able to grow very rapidly and have a lot of popularity with estimated $300 million in it second year. But this how ever doesnt mean that it have enough awareness yet when compared to cash ISAs and Stocks and therefore having less returns, because of it is risky it is aswell profitable with high interest rate but we should know generally That P2P are very risky and they are not covered by the Financial Services Compensation Scheme
3. Pension Scheme
This is also another tax efficient way in which you can Invest in the P2P properties in which it have two options to it as we will be discussed below;The Small Self Administered Scheme, which still stands as one of the most flexible pension scheme in the U.K was set up by limited companies exclusively for directors, some family members and senior employees because it permits you to use your pension plan and retirement benefit to invest on the business the other which is a Self Invested Personal Pension is different in such that it permits you to invest more on a wide varieties of ways which includes P2P property lending and also enjoy the tax benefit associated with the pension and this Self Invested Personal Pension have it own rule that determine the type of investment that you can go into.
It should be understood that peer to peer lending gives the opportunity to make a very good returns in a very short while but the risk associated with it must be under your total control and make sure that you consider how the late payments might affect you.
1. The Growing Appeal of Peer to Peer Property Lending. https://www.propertyinvestortoday.co.uk/breaking-news/2019/6/the-growing-appeal-of-peer-to-peer-property-lending
2. Warning Over Property Peer to Peer Default https://www.ft.com/content/99c44646-e806-11e8-8a85-04b8afea6ea3
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