PROSPI, a new shared property investment platform launched by Manchester-based property expert McCafferty Asset Management, seeks to enable investors with as little as £500 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, according to the release.
“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,” stated PROSPI Joint Managing Director and McCafferty Asset Management CEO Charles Whittle. “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.”
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, averred the platform. Investors will be provided with regular information and will receive quarterly dividends throughout the duration of the investment period.
McCafferty provides 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 aims to reduce the time between investors having to commit their funds and it generating an income, so called ‘dead money’, underpinning the predictability of dividends and, ultimately, the capital value of the property.
According to the platform, its offered properties are mortgage free, to not expose 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 6 April 2017.
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