Allbricks investment Vs
The Buy-to-Let investment market was born in 1996 when mortgages that no longer required the borrower to live in the house they were buying were introduced. Since then, there has been a boom in people making money with Buy-to-Lets, from courses on how to become a Buy-to-Let investor to running Buy-to-Let portfolios.
With Allbricks property investment, we've unitised residential property, giving you the benefits of a Buy-to-Let without many of the traditional buy-to-let hassles. The major difference with Allbricks is that you will be helping someone into the home of their dreams by investing with a home buyer. This unique approach, along with a more affordable entry point of £2,000, is changing the future of property investment. Discover more here:
As a Buy-to-Let investor, you need to find properties and do all the checks to make sure it’s a good investment for you.
With Allbricks the home buyers find the property they want, and we do all the checks.
On our site, you’ll have complete transparency into expected monthly returns and the potential for capital gains before you make any investment.
Unless you are a cash buyer, you will need a Buy-to-Let mortgage. This type of mortgage has been designed specifically for people who buy a property to rent to tenants rather than a place to live and should be viewed as a mid to long-term investment.
By leveraging a crowdfunding approach, no one borrows any money, and no one lends any money. You will own a percentage of the property you choose to invest in and should be viewed as a mid to long-term investment.
If you take out a mortgage to fund your Buy-to-Let you will be potentially impacted by rising interest rates, increasing how much you pay each month and reducing your profit.
There is no mortgage so you can avoid the direct impact of mortgage interest rates along with the benefit of no debt.
The minimum deposit for a Buy-to-Let mortgage can vary. It's usually 25% of the property's value, although it could be between 20-40%.
So, for a property that's £250,000, you'll be expected to put down anywhere between £50,000 (20%), £62,500 (25%) and £100,000 (40%).
No deposits required.
The minimum investment is from £2,000, depending on which property you choose.
You have to be able to buy more than one property with cash or multiple mortgages which also requires multiple deposits.
On our website, investors can easily invest in multiple properties to diversify their portfolio and control their risk. You can invest in as many properties as you like, but there are limits on how much you can invest in any single home. We'll keep track of it all for you, so you don't need to worry.
For many investing in a Buy-to-Let, the property in question will be a second property or even more if part of a portfolio. In April 2016, the Government introduced a 3% surcharge for any additional property purchase and you will most likely be responsible for the entire stamp duty even if you have a mortgage for a portion of the property.
The cost of the stamp duty is shared between the investors and the home buyer. If you invest 5% of the purchase price, you’ll pay 5% of the stamp duty.
When you invest during crowdfunding, stamp duty is charged at the higher rate because it's classed as the purchase of a second home.
When you buy from other investors, if stamp duty is payable you might be able to pay the standard rate if neither you nor your spouse own property outside of Allbricks.
Buy-to-let related administration, costs and overheads
Even if you hire a property management service to manage this you still have the responsibility of finding and managing tenants.
Finding good tenants requires thorough referencing, background checks, income verification and a credit check. It is recommended to factor in at least a one-month void period per year.
Every time you change tenants, you have to go through the vetting and legal process as well as between-tenant cleaning and possible repair bills.
We've replaced the tenant with a home buyer, who we call an 'owner-renter', and they’re as invested in taking care of the property as you are. No searching for tenants, no void periods and no between-tenant cleaning fees.
Landlords have a legal duty and legislation can be difficult to stay on top of. Ignorance however, is no excuse and hefty fines can be imposed if you do not fulfil your legal responsibilities.
Allbricks does require that you are involved in voting. Voting is mandatory for investors and home buyers so that everyone has a say on decisions that affect their investment. But otherwise, Allbricks is responsible for ensuring that the property and your investment meets legislation requirements.
You can pay to have a management service or handle the property management yourself, but generally, there are increased ongoing maintenance costs with a rental property compared with a standard home.
As well as having a home buyer who as an ‘owner-renter’ is as invested in taking care of the property as you are, all Allbricks homes come with our unique property management service. We aim to only engage with investors when a property issue isn’t covered by the maintenance fund or buildings insurance.
Although the value of your property can go down as well as up, historically property in the long term has provided investors well with an increase in value.
Again, the value of a property can go both up and down, but historically in the long-term property has provided an increase in value. If the Allbricks property increases in value you would benefit from the capital gains in correlation with the percentage of ownership.
Renters pay landlords monthly rent.
Owner-renters pay a monthly market rent to cover the portion of the property they don’t own. Investors get a share of this rent in proportion to the percentage they own.
Social impact investing
Buy-to-Let takes properties out of the market for home buyers and unfortunately, it’s hard to be a landlord. Almost a quarter of private-rented dwellings are officially classed as “non-decent”, meaning that they fail to meet basic standards for things such as heating or their state of repair.
With Allbricks your investment will have a positive impact on the home buyers you are investing with.
Your investment will be helping someone get on the property ladder into the first home of their dreams or even helping someone move up the property ladder as their needs change.
Our mission is to enable more people to buy a home. Having a safe home creates stability which is a foundational building block for positive growth and strong communities.
This comparison isn’t personal advice.
If you’re not sure whether an investment is right for you, please seek advice.
If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.
Allbricks has left no stone unturned to create a model designed to help home buyers get on the housing ladder fast. Built from the ground up, we provide a safe and secure way to become a home buyer, or to scale-up. Traditional mortgage providers have, for too long, had a monopoly on the housing market. Allbricks is the home buying revolution!