Leading expert backs new Shared Property Investment platform for private investors
PROSPI offers a simpler alternative to buy-to-let investments with as little as £500 investment required
A new shared property investment platform aimed at private investors has been launched by Manchester-based property expert McCafferty Asset Management.
PROSPI enables investors with as little as £500 (there is no maximum) to take a proportionate holding alongside other stakeholders in specific, fully-tenanted residential properties managed by McCafferty’s team of experts. Investors will benefit from predictable levels of income, plus any capital growth realised when the individual property assets are eventually sold (typically after a period of five years).
It is estimated that total returns – rental income plus capital growth – will average 15.6% over the five year term after all fees and charges.
The PROSPI model is based on each property being owned by a discrete company, known as a Special Purpose Vehicle (SPV), which will retain McCafferty as real estate manager. As stakeholders in the SPV, investors will be entitled to all the economic benefits of ownership.
All costs and fees are fully disclosed at the outset, including professional fees levied against the SPV. Investors will be provided with regular information and will receive quarterly dividends throughout the duration of the investment period.
The unique aspect of the model is provided by McCafferty’s exclusive access to an established portfolio of fully-tenanted residential properties owned by the Pervaiz Naviede Family Trust. This arrangement distinguishes PROSPI from similar models, which tend to invite inward investment before the individual properties have either been identified or tenanted. PROSPI’s approach significantly reduces the time between investors having to commit their funds and it generating an income (so called ‘dead money’). It also underpins the predictability of dividends and, ultimately, the capital value of the property.
The properties offered are mortgage free, so not exposing investors to the risk of future interest rate rises or the prospect of dwindling tax reliefs (interest deductibility against taxable income) under new tax laws that are due to come into effect from April 6th 2017. The properties also exclude development projects with all the unpredictability that these can involve.
Commenting on PROSPI, Joint Managing Director Charles Whittle, also the CEO of McCafferty Asset Management, said: “Many private investors either don’t have the money or the expertise to invest in residential property. Those who do have the time, knowledge and necessary capital to enter the ‘Buy-to-Let’ market still face the legal responsibilities of being a private landlord. PROSPI offers access to the sector, but without all the hassle. “
“The PROSPI model has been designed specifically to avoid the risks associated with gearing and property development, filling a gap in the market by offering more reliable returns in these uncertain times. The anticipated investment returns of PROSPI are based upon actual achieved rental figures and a sound understanding of local markets. We do not believe that making over-optimistic promises about performance is in the best long term interests of either private investors or the sector as a whole.”
Posted: 18th of November 2016