Shared Property Investment
I’ve been in London recently, over from NYC, catching up with the life I left behind a year ago. I am lucky to own a small property and have not done badly out of the investment I made six years ago. But get this, most of the UK can no longer afford to get on the property ladder in the area they live – the deposit simply too big and the mortgage repayments out of reach for many. This leaves a whole generation with nowhere to invest other than collecting money in a bank with little returns and no idea where/how your money is being used – there is no transparency with banking. So what’s a way to democratize the property market? Well, in comes in the form of a property investment exchange called The Property Investment Market. It’s not (yet) a ‘treehugging’ idea, but it has the potential to deliver real value to individuals and communities – if managed properly. And I do know that green buildings will form a large part of its property portfolio in the near future, as that was obviously one of the first questions I asked. So here’s how it works. Instead of buying a property outright and either living in it or renting it, you can buy shares in a number of given properties. It’s like having a property fund of your very own all accessed and managed via a log-in to your online property portfolio. You can buy one share or 100,000 shares, depending on how much you wish to invest. You can invest in one property or spread your money across a number. Each property has its own Managing Director who oversees the investment and the letting of the property. It’s like buy-to-let without the agents and without having to manage it yourself. It enables property investment in areas that otherwise may not attract that much attention and investment (my radar certainly does not extend much further than London), as you simply may not know the area or even like the area. More importantly, it provides access to property investment to locals who perhaps are already beginning to be priced out of an area in terms of investing.
With your investment you effectively become a shareholder of each property. That means you receive a monthly/annual report on your capital investment, updates to the property as well as insights into the development of the area. How about a monthly report on energy savings generated through energy efficiencies and improvements?
I like the idea of a group of shareholders being responsible for the property. It puts emphasis on greater responsibility (to each other) to maintain the property and, *ideally*, to invest in home improvements that will put it in good stead for future markets ie, energy efficiencies and eco home improvements. (Although, as yet, I am not sure this is exactly the case and I would like to see this). I like the idea of cooperative investment ie, groups of people coming together to do things that would otherwise be impossible. It is a democratic process.
I am wondering how this enabling service could be leveraged in different markets. So, it would be interesting to be able to invest in developing countries (if the investment where responsible) to help support the development of new ‘sustainable’ towns/communities. You could match-fund peoples development plans, so that locals could take a percentage ownership and develop effective housing. The service could be used as a form of micro investment.
I am also thinking this model, or this service, could be nicely transported to enable groups of people (locally) to purchase other things together or share ownership like a new local business, renewable energy, a slice of the rainforest to be retired, community supported agriculture… Who knows?
Written by Tamara Giltsoff.