FAQ
- How Much Can I Make?
- Show Me An Example
- What Do I Actually Own?
- So I Have Possessory Rights - Who's Responsible For The Running Costs?
- What If The Tenant Leaves And There's A Void Period - No Rent?
- When Do I Get The Lump Sum Payments?
- How Long Can I Keep Benefitting From This?
- What If I Want To Sell My Share Of The Property?
HOW MUCH CAN I MAKE?
Good question! You are looking at 7% p.a., paid monthly. This is supported by the rental income. In addition to that, your patience will be rewarded because you also share in the long-term capital growth in the property's value. Taking these two income streams together your return will average 20% per annum or more. And because we're buying at a discount there will be equity of 20-35% in the property from Day One. YOU get a share of this to give you a head start!
SHOW ME AN EXAMPLE
Consider a property valued now at £125k. We purchase it at £100,000. You put in £10k for a 10% share, based on the property purchase price. We then credit you with 10% of the current property value of £125,000 - instantly making your share worth £12,500.
Every month you will receive a payment of £58.33 (£700 per annum = 7%). This is supported by the rent the property earns.
In addition, from time to time, you will get a lump sum payment based on the property value. Here's how that works in our example: initially your share of the property is £12,500. Imagine the property has increased by 55% to £193,750. Now your share is worth £19,375. If this gain in value were to take 7 years, the addition of £9,375 to your initial £10k input would be 93.75%, roughly 13.39% per annum. Add this to the annual 7% gain you receive from the rent and you've made around 20% per annum total gain.
(It may be hard to accept right now, but historically UK property has risen in value considerably faster than that.)
WHAT DO I ACTUALLY OWN?
You own possessory rights to a percentage of the property - typically between 5 and 15%. This is based on the amount paid for the property rather than the market value.
SO I HAVE POSSESSORY RIGHTS - WHO'S RESPONSIBLE FOR THE RUNNING COSTS?
Giroma will insure the property and care for routine maintenance including annual boiler service, gas safety check etc. We will also ensure that the property is managed effectively. If major repairs are required (over £1,500), and they are not covered by the Buildings Insurance, you agree to contribute according to the percentage share you hold in the property.
WHAT IF THE TENANT LEAVES AND THERE'S A VOID PERIOD - NO RENT?
Don't worry! We will pay your monthly return regardless. We're that confident in the quality of the properties and our property management skills.
WHEN DO I GET THE LUMP SUM PAYMENTS?
As market conditions change we will assess the value of the property and suggest ways to extract some of the capital gain from time to time. You might want to do this in a way that makes best use of your annual CGT allowance.
HOW LONG CAN I KEEP BENEFITTING FROM THIS?
This is an income-producing investment that you can keep for the rest of your life if you wish. You can include your share in your estate and pass it on to future generations.
WHAT IF I WANT TO SELL MY SHARE OF THE PROPERTY?
As you hold possessory rights you can offer to sell your share back to us or to another investor if you no longer want it.