Big Discounts With Property Investment Clubs?

A stagnant stock market, low interest rates and booming property prices over recent years have lead to more and more personal investors deciding to join property investment clubs.

Property investment clubs are organisations that either buy property in volume and resell it to their members at discount prices or negotiate the purchase of large numbers of properties from developers, again ensuring discounted prices. Clients can often expect to make savings of up to 25% of the property's market value.

Additional services from property investment clubs vary, with some offering financial and legal assistance, along with local property market research. Volume purchases can enable discounts on mortgages, solicitors, letting and estate agents fees.

For the personal investor with limited property investment experience, these organisations offer an easier entry into the market and the opportunity to generate significant equity from the original savings. For example a property valued at Ł100,000 could be purchased for Ł75,000. Selling that property at market value would generate a profit of Ł25,000 minus fees.

Club fees

Property investment clubs tend to make their money either by charging an acquisition fee of around 2 or 3% per property purchased or they charge members an annual membership and take an agency fee from the developer.

Choosing an investment club

As with any investment, buyers should do their homework before deciding to invest and ensure they are dealing with a reputable organisation.

A large amount of property offered by clubs is off-plan. This is where you buy a property before it has been built and hope that by getting in early you secure a bargain before selling at profit when the property is ready for market.

This practice works best when house prices are rising, but when the market is slower, you run the risk of the property dropping in value and by the time it is built, it could be worth less than you paid for it.

There have also been a few cases of unscrupulous organisations selling off-plan property, with no intention of developing it.

Again proper research will help to ensure you choose a reputable company. Be prepared to ask questions about the potential sale value, rental value, quality of the workmanship and the company' credentials. A good club will be able to provide you with this sort of information.

It is also worth trying to get in touch with other club members, particularly those who have already purchased properties, to find out about their experiences.

Setting up your own club

In addition to professional investment clubs, many friends, families and colleagues are beginning to set up their own syndicates, then pooling resources to secure bulk discounts and spread their risk. Often a small number of individuals within the syndicate will act as asset managers, researching the market to find the best opportunities and advising others within the group.

Don Suter is Managing Editor of the UK Property Portal (http://www.ukpropertyportal.co.uk), an online directory and magazine for UK property sales, rental, surveyors, mortgages, conveyancing, property insurance, removals, news, investment and development

Meet the real estate broker’s interns: an ambitious group willing to do anything, earn nothing and wake up early on a Sunday to fluff the couch cushions at open houses.

In Manhattan, parking lots and garages are making way for all sorts of development, especially luxury condominiums.

Gray Burton lives in a 250-square-foot space he furnished with antiques he’s been collecting for years.

MacKenzie Thompson’s plan to buy a multifamily house in foreclosure did not pan out. She decided to buy a home in Westchester County.

A photogenic Westchester suburb with high-profile residents is also known for its art museum and a performing arts center.

A Ditmas Park co-op, Upper East Side co-op and an Upper West Side condo.

A 10-year-old house with six bedrooms in Montvale, N.J., and a renovated four-bedroom in Bronxville, N.Y.

Wealthy investors are wiring millions of dollars to New York to snatch up a piece of 157 West 57th Street - what will be New York City's tallest residential building, with 90 floors overlooking Central Park.

An apartment at the Trump International Hotel and Tower, opposite Central Park, was bought anonymously through a limited liability company.

The anchor of a proposed historic district will surely be a clutch of four mansions at Riverside Drive and 72nd Street.

Success in challenging property taxes means not having to put as much money aside in the escrow account.

Taking responsibility for a roof leak; a bank loan for capital repairs; lender says no to co-op sublet; next time, don’t forget the key.

Summerview Square is a town-house-style apartment project going up in Norwalk after a previous developer walked away, leaving squalor in his wake.

A drop in prices and low interest rates means many buyers on the Island can afford to wait.

In Hudson County, developers are working on several projects that would add thousands of units in waterfront communities like Hoboken, Jersey City and Weehawken.

A development in Austin, Tex., is an ambitious attempt to upend the conventions of the American subdivision.

A town house in New Orleans, a penthouse in Baltimore and a ranch house in Washington.

Housing prices continue to fall nationwide, with Atlanta earning the distinction as the weakest performer.

The financial crunch has been felt in Aruba, but not severely enough to cause large numbers of foreclosures and short sales.

A new law that allows businesses in Philadelphia’s Market East district to draw revenue from large digital signs has drawn attention from developers.

With its concentration of pharmaceutical giants and academic powerhouses, the region could be a major center for life sciences businesses, developers say.

The president of the New York Building Congress, which represents professionals in the construction industry, has been running the nonprofit association since 1994.

A frenetic little industry has taken root in New York City based on finding and publicizing the once-and-future homes of just about anyone with name recognition.

The plan for a business improvement district in SoHo would help with the trash problem, but some residents don’t want to cede more ground to tourists and real estate titans.

A Ditmas Park co-op, Upper East Side co-op and an Upper West Side condo.

A 10-year-old house with six bedrooms in Montvale, N.J., and a renovated four-bedroom in Bronxville, N.Y.

Properties in New Orleans, Baltimore and Bellevue, Wash.

You want them, you need them, and these power tools will pay for themselves.

One man’s discovery of the vast powers of the drill.

An abandoned log house with a sinister air, the Smith Mansion in Wyoming is the stuff of legend.

Chris Hacker, the chief design officer at Johnson & Johnson, shops for hot water bottles that can come out from under the covers.

Should I remove the family photos hanging on my wall before listing my apartment?

An architect and an interior designer have created an online database of hazardous building materials.

The handmade house, doughty and particular, is being celebrated in three new books.

Beginning Friday, the NoLIta store Haus Interior will host Wood Shop, a pop-up store created by David Stark.

Compare the cost of renting and buying equivalent homes.