It can be a time-consuming affair being a landlord. Dealing with tenants, sorting out problems in your properties and keeping up with the paperwork all takes time and effort, which if you work full-time is an impossible proposition. But there is an answer if you want to give property investment a go without getting your hands dirty as a full-time landlord.
The REIT Scheme
Real Estate Investment Trusts (REIT) are not a new idea – they were introduced into the UK back in 2007 – but this is the first time a mainstream UK residential property REIT has been made available to UK investors.
How it works is very simple. Investors buy shares in the REIT and any profits made as a result of rental income and capital gains are tax-free. There is a minimum investment of £1,000 in the REIT platform SyndicateRoom, but investors can drip-feed cash into the scheme and take out 90% of the rental profits as a dividend payment.
A Win-win Opportunity
The owner of the REIT says the scheme is a win-win investment opportunity for would-be buyers as it can help investors realise a tax efficient income from the buy to let market without the need for a significant investment of time and capital.
House prices in many parts of the country are putting investment properties out of reach for many small investors and with mortgage interest rates expected to rise in the next twelve months, a residential REIT is a liquid alternative to buying and managing a traditional buy to let property.
