01 Low investment barrier
In 2016 the average cost of a buy-to-let property in the UK was £206.000. In comparison a property loan note investment can be purchased from only £20.000. Due to the low purchase price they are purchased with cash without the need for arranging a mortgage.
02 Guaranteed yield
Buy-to-let properties are vulnerable to the market, Which can mean loss of value or periods of no cash flow (the time between tenants, for example). A commercial investment works on a different set of fundamentals and is less volatile in times of property price fluctuations. Investors benefit from knowing that they are locking in a guaranteed rate set by the developer for a set period of time, offering a reliable income.
03 It reduces tax paper work
Buy-to-let properties bring additional taxation paperwork like tax reliefs and calculating cost deductions. Property bonds and loan notes are a direct agreement between you and the developer, providing a simply income stream for you to declare to HMRC each year.
04 No day to day management tasks
If you have invested in buy-to-let properties before, you may be familiar with managing the advertising to new tenants, maintenance & repairs., and resolving tenant issues. or neighbour disputes. This can be a drain on time and cash flow.. Investing in notes and property bonds eliminates all of these issues.
05 Cash flow friendly
Once your investment is completed..returns arrive from the very next month. They are both consistent and reliable.. plus there is no uncertainty of tenants paying rent each month. These funds can be used to provide an additional income stream or used toward another investment.
06 Diversifies your portfolio
If you are already invested in traditional property or shares, adding bonds and loan notes to your portfolio can help reduce portfolio risk. Commercial investments are uncorrelated to the traditional housing market and offer investors peace of mind when their traditional bricks & mortar properties may be losing value in a downward market.
07 Guaranteed capital growth
Property bonds and loan notes often come with bonuses at their maturity date. An agreement like this can provide certainly about the value of your investment and eliminate worry about market volatility.