Why are Property Bonds growing in popularity with investors and developers?

With us living longer, pension funds are not giving many of us the financial future we planned for, and other ways are often sought to grow financial nest-eggs to top up that future income. Bank savings accounts aren’t delivering on that either…

So is there a place in a portfolio for Property Bonds – for those of us that would rather be the lender than the property developer?

With good Property Bonds, you team up with an established property developer in a Joint Venture. But there are none of the set-up costs for the bond holder that you would normally associate with a direct property development project, or the advisor fees that come with buying traditional regulated investments: all of your capital goes to work for you.

Here are a few other key reasons to consider profiting from Property Bonds:

  • Property is seen as a secure asset class and with not enough homes being built in the UK demand continually outstrips the supply.

  • There are more and more obstacles in directly owning investment property. Heavier taxation for residential investment property and reduction of tax reliefs for expenses; difficulty in raising mortgage finance for buy- to-let; dealing with tenants; licensing; regulation, the possibility of rent controls; the list goes on). Many property investors are looking for less hassle and more profit: being the lender, not the landlord.

  • As part of this movement, investors who are cash-rich and time-poor are looking to partner with developers by lending rather than getting directly involved in the day-to-day running of projects.
  • In uncertain economic times a predictable fixed income for a known period of time has much appeal.

  • Whilst no investment is risk-free and they’re not for everyone, a well-chosen Property Bond can offer credible security and a practical exit strategy should things go wrong with the developer.

Learn how to spot a good property bond, and those to avoid. All this and more is covered in our Property Bonds guide – grab your copy today:

[eBook] Property Bonds – a brave new world of property investment?

There is a lot of talk about Property Bonds as a new, simple and secure way of enjoying bank-beating returns without the hassle of direct property ownership. But choosing from the growing list of advertised products can be a minefield.

So to help you learn about this new approach to property investment, I’m delighted to announce we’ve written a great new guide which you can download now for free.

Over the last couple of months we’ve been very busy behind the scenes studying the Property Bonds market place. As bonds become more and more popular with medium-sized property developers as a way of generating finance for their projects, we are set to see more and more bonds and loan-note investments being offered.

Our findings have been fascinating.

The choice of property bonds is already somewhat bewildering, and the range of quality and safety is wide. We have discovered that there are some excellent offerings available today with very reputable property developers, business models and bond structures that offer investors strong but realistic returns, with investor security at the forefront.

But not all such bonds are equal. It has concerned me greatly that very high rates are being advertised in some cases to attract investor interest but when we apply the weight of our due diligence processes, many leave a great deal to be desired.

We’re sharing our knowledge with investors, and showing them how to discern the good products from the mediocre as well as providing our own critique and expert guidance to them. 

To find out more about the world of Property Bonds, you can download our Special Report today…

[Report] Northern UK Property Day with Stephen Beech & Beech Holdings (Manchester)

Yesterday’s viewing trip to Manchester was a real eye-opener. The team at Beech Holdings (Manchester) are preparing to replicate their extraordinary success in converting old office buildings in central Manchester into comfortable eco-friendly apartments.  

Stephen Beech has built a personal property portfolio worth over £23 million using this same approach. He began on a small scale by purchasing terrace housing, keeping the exterior intact, building an interior frame and extending upwards to convert each into 4-6 apartments.

The vast majority of these apartments were fitted with sophisticated energy saving devices such as solar panels (in the early days), energy-efficient windows and warm air heat exchanges. The usual rental model for these types of apartments in Manchester are all-inclusive, so whilst Stephen was making a positive contribution to saving the earth’s resources, he was also able to undercut other landlords on rental charges and still get a better profit margin.

The way to really succeed in property? Simple innovative ideas – put into massive action.

A smart move, since Stephen Beech now has around 450 personal properties bringing in over £1 million a year in rental income, and his business model has scaled up beautifully in Manchester to an almost industrial size. The planning authorities in Manchester are keen to renovate existing empty office buildings and are favouring this over new-build as a matter of policy. 

Beech Holdings (Manchester) is set to dominate Central Manchester

Beech Holdings (Manchester) is very much in the ascendancy. They have ten office conversion projects in various stages of planning, with a further seven identified for the near future. Pictured above is one of these ten developments about to begin, on Waterloo Street in the city centre.

Beech is looking to raise £6 million in crowd sourced funds to finance the purchases, and has already achieved £2.5 million raised from private individuals in just 3 months. We are inviting qualified individuals to take part starting from £20,000 invested for 5 years and in return receive annual interest on10%, paid quarterly. This is a great return on a passive investment and is backed by first charge on the properties, as well as commercial and personal guarantees. This is clearly a property investment with security far greater than “going it alone” in the buy-to-let world.

So why should Beech bother with relatively small investors like us?

You may well ask why Stephen is going to the trouble of raising £6 million of funds this way. Why not go to the banks or sell some of his apartments? Simple reasons:

  1. Banks are still not lending sufficiently to large property developers.
  2. When they DO finally agree to lend it’s too late. In Manchester the secret is to beat off the competition quickly and buy with cash.
  3. The other lending option, Bridging Finance, can cost 20-24% annual interest, so recycling this would be very expensive. Would you prefer to pay private investors 10% or a bank 24%?
  4. Why not sell some of the apartments? Stephen could do this but that would be throwing away tracker mortgages at very low rates, and therefore a considerable chunk of his net income.

So opening up to private investors is the natural and obvious solution. Beech gets relatively low cost loans whilst investors enjoy incomes many times greater than a savings account, and much higher than a traditional net rental yield, with none of the hassle. When it comes to investors in his business, Stephen Beech’s philosophy is one of complete openness. Our due diligence process can testify to this – we’re confident that any reasonable investor question will be answered directly – and to their satisfaction. All enquiries and professional due diligence is very welcome. If you’re looking to invest in property or grow your investment portfolio, this has surely got to be worth investigating.

Find out more about investing with Beech Holdings. Download our brochure today.