Finance Landlords in the UK with as little as 100 £
Landlordinvest is a platform for direct peer-to-peer lending for property developers to real estate in the United Kingdom, specifically England and Wales. The platform facilitates direct access to commercial and residential property loans in GBP. Every loan is backed by collateral of the property and the overall track record is so far good. The platform was founded in 2014 and has since helped investors realize projects and returns by connecting finance dedicated to completing developments, refurbishments, modernizing and purchases among other.
Last updated: May 13. 2020
|Business:||Real Estate Lending|
|Founders:||Filip Karadaghi, Joe Vallender, Nikolajs Smirnovs|
|Countries:||England & Wales|
|Regulated:||Yes – FCA Authorized (FRN 660926)|
|Requirement:||EU Bank account|
|Reports:||2019 (PDF), 2018 (PDF), 2017 (PDF), 2016 (PDF), 2014-15 (PDF)|
Office location in London
Table of Contents
Investor introduction video - How does Landlordinvest work?
Landlordinvest Pros & Cons
Characteristics of Loans
5% – 12%
6 – 36 months
Asset as Collateral ⇙
Minimum Investment ⇙
Direct Investment Structure
Loans on Landlordinvest
Landlordinvest has a simple yet informative overview of all the different real estate loans on the platform. In the top of the page, you will find the most basic information, such as interest rate, months left of the loan, amount available for investing, Loan-to-Value (LTV), and risk rating. Below this, you will find more information about the details of the loan and even the option of downloading the valuation report. Furthermore, you will be able to find information about the specific collateral, the property details, revealing information about the security, such as size, area, and building materials, which is also elaborated in the valuation report.
A great thing to highlight about Landlordinvest, except from the comprehensive information available to lenders, is the respect shown towards the risk of investing into this type of alternative finance. Many platforms disregard or try to hide the risks involved with the investments, but this platform is very transparent in what investors should be aware about. This awareness about risks involved is also seen in the loan details where, besides an public valuation report, every borrower that is used as security is checked at a third party credit agency such as Experian. This score is made publicly available and can be used to decide whether to invest in a specific project.
The platform divides the main risks of P2P mortgage lending into six different categories:
- Borrower default: The risk of a borrower not repaying the loan. This is the biggest risk according to the Landlordinvest.
- Mortgage fraud: The risk of someone obtaining a mortgage under fraudulent circumstances.
- Platform insolvency: The risk of default in the company operating the lending company.
- Property market risk: The risk of borrowers ability to pay being affected by a downturn in the UK property market.
- Interest rate risk: The risk of a general market rise in interest rates above what you are earning.
- Illiquid instrument: The risk of not being able to sell your investment before end of the loan term.
Buyback Guarantee on Landlordinvest
As with most platforms operating with direct peer-to-peer lending, there is no buyback guarantee in case of project default. This type of insurance project is mostly used by platforms with loan originators since the transparency is at a very low level and investors need some sort of security (even if it’s weak) to be interested in those type of businesses.
At Landlordinvest the loans are assigned a credit rating depending on the collateral and the downside of not having a buyback guarantee is that investors need to do due diligence and look into the specific projects as well as take diversification seriously. It is recommended to have 100+ loans to have a proper diversification.
Direct Investment Structure
There are two different types of investment structures in P2P investing:
- The direct structure means you are buying a claim against the borrower directly.
- The indirect structure means you obtain exposure to a loan by investing in a loan issued by a platform company to the loan originator.
Landlordinvest is a traditional lending-based crowdfunding platform and every loan is structured as a direct investment structure. This helps to make it easier to better evaluate the risks involved, since you know that you are lending directly to the company/owner of the property and not lending to the real estate company through a loan origination middleman.
Manual investing on Landlordinvest is simple and straightforward. The loans are usually above £100,000 and up to £400,000 which is in the high range compared to most platforms, leaving the minimum investment amount at a low £100. There is a satisfying number of new loans consistently being published for a direct investment structured platform, but a higher number of loans published going forward would certainly help increase the possibility of diversification. When manually investing you will see the real estate projects available as displayed below, while also having the option of tapping into projects put up for sale on the secondary market.
This platform do not yet offer automatic investing and you have to select every single project you invest into. However, this is also often to be preferred as due diligence on projects are necessary to obtain the best possible interest rates compared to the risk associated with obtaining the rate. Landlordinvest focuses on quality instead of quantity and the number of loans available makes it comprehensible to manually invest in the primary and/or secondary market. This also leaves more time to do due diligence on the real estate loan.
Landlordinvest operates an efficient secondary market, giving the option for lenders to exit a loan before the end of term. This increases the liquidity of the investment and is a huge plus in terms of being able to allocate capital as the investor wishes. Though the secondary market is very efficient if you want to sell loan parts, it is less efficient if your looking to buy loan parts. As of writing, there are no current loan parts available on the secondary market even though over 2 million pound worth of loans have traded hands outside the primary market. So if your looking into buying loans on the secondary market to quickly diversify when you get started with investing on the platform, it seems that you have to act quickly – and guard this specific secondary market page as much as I would with a lounge chair on the beach!
Nice to Know for Investors
Registering at Landlordinvest is simple and easy to do. Whether you’re an individual investor or investing as a company, creating an account requires just an email and a password. The platform is available to everyone with a European bank account. After creating an account, the platform will send an email with instructions to register. The platform complies with KYC (Know Your Customer) and you therefore need to provide an identification document and additional information to be able to withdraw money from the platform. Thus, you can create an account and invest, but you will have to complete the KYC before unlocking withdrawing.
Deposit & Withdrawal Process
Depositing funds to your investor account is done in three steps:
- Transfer money to your Landlordinvest account from your bank with traditional bank transfer or TransferWise.
- Your funds will be available for investment within the day of confirmed arrival (usually 1-3 banking days).
- After the funds are received and added to the account, you will receive an e-mail confirmation.
Withdrawing funds is very simple if you are already KYC validated. You just click the “withdraw funds”, enter the desired amount and wait the 1 to 3 business days before the requested amount land in your account. There is no minimum withdrawal restrictions and no further additional fees or commission for withdrawing the funds from the platform – except maybe from your own bank. Remember, depending on their fee structure, your own bank might charge fees for handling the transaction or exchanging currency.
Landlordinvest has a simple portfolio overview of your real estate investments on the platform. Your reporting section is divided into three areas:
- Account Overview: Your balance, available cash, comitted investments, the outstanding principal and your total account value.
- Earnings: Total received interest and future interest due.
- My Investments: The complete overview of all investments you have or have had on the platform, pending, active, sold and repaid in full. This section is it’s own and is further divided into the Simple View and the Advanced View.
No. The interest you earn is gross of tax. You are responsible for your own tax affairs. HMRC has published a guidance that you can find here (https://www.gov.uk/guidance/peer-to-peer-lending)[https://www.gov.uk/guidance/peer-to-peer-lending]
LandlordInvest FAQ: “Is the interest that I earn net of tax?”
LandlordInvest has a chat function on the website in the bottom right corner, that provides direct access to the customer support. They usually answer quite fast in business working hours (Mon – Friday, 9.00 – 18.00 UK time) and we experience general good communication with their team. We have yet to experience not being answered within the same day/few weekdays. They are qualified to answer every question we had and do not seem to avoid any sort of questions. We get the impression that the platform is serious about their investors.
Who Can Invest?
You have to be over the age of 18 to become a lender.
You have to register a lending account to be able to lend. We will also need to confirm your identity. We can usually do this automatically, but sometimes we will have to confirm details with you directly.
Please click here to register as a lender.
LandlordInvest FAQ: “How do i become a lender?”
Is LandlordInvest Regulated?
LandlordInvest Limited is regulated by the Financial Conduct Authority and is Authorized to perform the activities it does as a financial company under the financial registration number 660926. The platform is not covered by the Financial Services Compensation Scheme (FSCS).
|Total investments:||£9.6 million|
|Total capital repaid:||£6.8 million|
|Total investor earnings:||£800 thousand|
|Secondary market sales:||£2.8 million|
|Number of loans:||50|
|Latest financial report:||2019 (PDF)|
Please note that this overview may contain affiliate links. It means that a commission is earned if you decide to invest after using the link – of course without additional costs to you. The information on this site does not constitute investment advice and is solely to give you a simple and easy overview of the platform. Always conduct your own due diligence and consult your financial advisor before making any investment decisions.