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Proptee: £0 commission property stock exchange
- deleted 6y ago[deleted]
- possiblelion 6y agoOh this is cool. However always wary of what happens to my property investment when the startup folds.
- hmate9 6y agoLove the idea! Especially in the age of Robinhood, I can really see this taking off (and I hope so too I'd love to use it). Sok sikert :)
- retube 6y ago"Safer than stocks. The stock market is volatile and risky compared to property ownership" That's a bold statement. Property markets can crash too. And what happens if a crappy tenant trashes the place, or the property turns out to have subsidence, or asbestos, or covered in dangerous cladding? And insurance doesn't pay (for whatever reason, plenty of real world examples of this)
- WanderPanda 6y agoAlso in the stock market you have some stronger notion of the efficient market hypothesis working in your (or better the average persons) favour
- wolfretcrap 6y agoIn India you invest in land not home if you are looking for a storehouse of value.
- cfontes 6y agoSo I guess since there is no commision all taxes, fees and inevitable maintainance and renovation costs are already priced in, which is not bad but interesting. It's similiar to Real Estate Development Funds we have in my country but out of tha stock exchange.
- Mizza 6y agoI wonder, what happens when this become ubiquitous? We're all just homeless landlords, paying rent to each other?
- xanth 6y agoUniversal socialization of housing wouldn't be the worst end state.
- dmw_ng 6y agoWill be interesting to see how they build their management fee in, what realized fees look like, how units are valued and whether that price can be independently verified. Clearly the aim is to dress this up to feel like exchange trading, but there is no open market for some standardized unit of "fractional landlording", so presumably they are always on the other side of every transaction.
- londons_explore 6y agoI would happily be on the other side of many of their transactions... I imagine they'll be severely short of liquidity, and therefore there'll be a decent opportunity for anyone willing to provide that...
- bhickey 6y agoIsn't this just a REIT with no diversification?
- cuchoi 6y agoIn the equilibrium, this would probably lower rents and increase house prices?
- _0o6v 6y agoWhilst this is no doubt innovative, everything that is abysmally wrong with property ownership in the UK stems from complicated ownership structures like that being proposed here. Just look at the leasehold scandal (and upcoming reform), the push for commonhold, and the things that go wrong (such as the cladding scandal following Grenfell). Homes are not investment vehicles to make people wealthy - they are a fundamental human right that many people are priced out of, or subject to unscrupulous landlords and freeholders exploiting what is still essentially a feudal system.
- onion2k 6y agoHomes are not investment vehicles to make people wealthy.. A huge number of people use the equity from investing in a house as a retirement fund. They very literally are investment vehicles. You can argue that they shouldn't be, or that there should be a class of housing that isn't treated like an asset, but that would be very hard to achieve without some serious market manipulation.
- rozab 6y ago>or that there should be a class of housing that isn't treated like an asset No need to talk in hypotheticals, this was once the case. https://en.wikipedia.org/wiki/Public_housing_in_the_United_Kingdom https://en.wikipedia.org/wiki/Public_housing_in_the_United_K... https://en.wikipedia.org/wiki/Housing_Act_1980 https://en.wikipedia.org/wiki/Housing_Act_1980
- chriswarbo 6y ago> that would be very hard to achieve without some serious market manipulation. Note that the housing market's already heavily manipulated, in an effort to keep the Ponzi scheme going a bit longer (e.g. Help to Buy, etc.)
- jphoward 6y agoIsn't Help to Buy only for first time buyers, so it biases against Buy to Lets?
- hanoz 6y agoJust what this country needs, more barriers to entry for struggling would be owner occupiers.
- mytailorisrich 6y agoIt must be said that in the UK property is governed by specific law and specific rules. These may vary per country (E.g. Scotland vs England), I'm only familiar with England. For example a contract to sell/buy property must be done by deed, which among other things requires special wording and witnessed signatures. Owners are also registered with Land Registry and there is a limit to 4 legal owners. If there are more owners a legal instruments like a trust must be setup in order to create beneficial owners. Bottom line: it is not simple. Whatever this website allows to sell and buy it is unlikely to be actually shares in properties, but rather some contractual rights to receive a share of profits based on level of investment (however that might be calculated as it's not clear), like property investment funds, which this effectively likely is. Values of properties do go up and down. How can they adjust on a daily basis? They cannot. Best one can do is to hire a Chartered Surveyor every 6 months or so to get an independent valuation.
- tkdubs 6y agoWhen is someone bringing this out for infrastructure investments. I want to be able to own 0.0001% of a sub-sea cable between UK and Europe.
- rwmj 6y agoCan't you buy into the company that owns it (assuming it is publicly listed) as a proxy for that?
- nubela 6y agoSee https://landx.id https://landx.id for the equivalent for property micro investments in Indonesia. Context: We pivoted our crypto exchange startup into LandX because we (the founding team) got sick of people trading over hype. Fractional ownership of cryptocurrency is awesome because it let anyone get into the game. What if we can do the same for something solid on the ground? So LandX -- for Indonesia.
- andreiblaj 6y agoWhat a great idea! It complements really well with stock investments. Good luck!
- applepple 6y agoLeasehold https://leasehold.io/ https://leasehold.io/ is an alternative which uses a deflationary blockchain cryptocurrency to distribute profits to token holders. It distributes profits via a token buyback (and burn) mechanism which maximizes the reward for long-term token holders. When the buyback comes at the end of each month, you can sell tokens back to Leasehold Holdings on one of the exchanges and cash out or you can hold your tokens and instead benefit from capital appreciation of those tokens. Capital appreciation is guaranteed (in the long run) since each buyback reduces the remaining total circulating supply of tokens (in a cryptographically verifiable way). Also, Leasehold plans to become a multi-company blockchain project to benefit from network effects. Our community also runs a decentralized exchange so that anyone can trade the Leasehold token against a mainstream cryptocurrency (Lisk) https://ldex.trading/ https://ldex.trading/ - The DEX code is fully open source so anyone can launch their own decentralized market to trade the Leasehold token against any other compatible token.
- joosters 6y agoA very good reason to avoid this company like the plague!
- _0o6v 6y agoThe term "leasehold" has very negative connotations in the UK, just so you know. https://www.thisismoney.co.uk/money/mortgageshome/article-8540685/Government-advisers-propose-radical-leasehold-reform-potentially-helping-thousands-families.html https://www.thisismoney.co.uk/money/mortgageshome/article-85... https://www.bbc.co.uk/news/business-54023631 https://www.bbc.co.uk/news/business-54023631 https://www.which.co.uk/news/2019/06/leasehold-scandal-one-year-on-has-anything-really-changed/ https://www.which.co.uk/news/2019/06/leasehold-scandal-one-y...
- applepple 6y agoWe're going to try to work to change that. In the long term, our approach should help democratize property ownership. It should also create fundraising opportunities for new projects; either using LSH token as the shared currency or using a 'sidechain' (this can help to facilitate some degree of inter-generational wealth transfer).
- bencollier49 6y agoI wonder if there's buyer-side liability. If you purchase a property which then incurs vast costs due to a technicality in the deeds (example would be a duty to maintain something), who pays?
- rwmj 6y agoWhoever is foolish enough to invest in this fund is surely going to find out. Best of luck there.
- mawbie 6y agoWhat happens to the costs of ownership? e.g. service charge, boiler repairs etc?
- londons_explore 6y agoProbably distributed evenly over the 'shareholders'. Their screenshot doesn't show "Your share of the leaky roof repair bill: £1400"! Also, Proptee is in a very powerful position being able to choose which contractor fixes that leaky roof. Plenty of other management companies only hire their mates who give big kickbacks and charge skyhigh rates for basic maintenance.
- londons_explore 6y ago> Proptee is responsible for managing the entire investment portfolio. Operating fully in-house allows us to keep your fees to the minimum. At the moment, we charge only a small management fee of 0.85%. So Proptree is going to find tenants, clear blocked drains and repair leaking roofs all for 0.85%? Or are they going to hire their mates to do it out of the capital amount, who will take massive commissions?
- mytailorisrich 6y agoIt has to be 0.85% of what people invest, so 0.85% of the fund value, which is ~ the capital amount. So for a £300k house that rents for £9,600 pa I read that as their fee is £2,550 pa, not £81.6 pa... A letting agent would probably take ~15% of rent so ~£1,450 pa. Repairs are generally charged in addition to the management fee and it's quit possible that they will do the same by deducting the costs from the fund.
- piracy1 6y agoIt would be neat to see them issue ERC20 or some sort of ethereum token associated with a given property. Though I am unsure if that would work with the current legal structure.
- maest 6y agoWill this offer a way of shorting these stocks too?
- elAhmo 6y agoSeems like an interesting idea. I happen to know the founder and he is a really smart and a hard working person, with quite a lot of experience trying out different ideas, so I wish him and the team a lot of success!
- denisec 6y agoAside from morality / economics, this is hardly innovative. Tokenised property investment has been going on in the UK for years. The biggest players now are: https://www.propertypartner.co https://www.propertypartner.co who started in 2015... They even have a secondary market or exchange which is a regulated MTF (https://www.investopedia.com/terms/m/multilateral_trading_facility.asp https://www.investopedia.com/terms/m/multilateral_trading_fa...) where you can trade your investment using limit and market orders.