Do you want to own property without the hassle of maintenance and tenants?
Can that be done? The answer is YES. In this BitOfProperty review, I will let you know how to start investing in property and collect rental income, without having to deal with maintenance, tenants, paperwork, etc.
BitOfProperty is a new platform that gives the investor the possibility to own bits (pun intended) of property. The idea is that you purchase fractions of the property. In return, it gives you rental income and the appreciation value.
BitOfProperty is is a crowdfunding platform where each investor gets to own a piece of property. The platform allows both for rental income and appreciation of the property. When you have invested in a property you will start to make rental income. When the investment term ends, the property is sold and you will profit from the appreciation of the property.
BitOfProperty is a real estate crowdfunding platform that allows people to own shares of properties for as little as €50. The platform finds and evaluates its own projects. The investors fund the properties and receive both rental income and capital gains from the properties.
- Investment types: Real Estate
- Investment term: 2-5 years
- Interest rate: 8%-9% (including appreciation and rental income)
- Auto-invest: No
- Buyback guarantee: No
- Fees and costs: 10% of rental income
- Minimum investment: €50
- Currencies: EUR
- Secondary market: Yes called “over-the-counter”
- Sign-up link: BitOfProperty
What is BitOfProperty Crowdlending Lending Platform?
BitOfProperty is a real estate investment platform that allows people to start investing in properties with as little as €50. They were founded back in 2017 with headquarters in Singapore and a subsidiary in Estonia.
Investing with BitOfProperty is like investing in stocks. The investor receives a share in the property which will represent the beneficial ownership. This means that the investor will have the right to rental income.
Owning shares within BitOfProperty is completely passive and does not bring any obligations for the investor.
All operational matters like property management and tenants are done by the team at BitOfProperty.
How Does BitOfProperty Work?
BitOfProperty is a crowdfunding platform that is funding real estate. BitOfProperty is sourcing properties. Each of the properties on the platform is screened and evaluated. If the property match BitOfProperty’s criteria an investment term is set and the property is made available on the platform.
The properties available can be found through browsing their “property” market. Each of the properties holds valuable information for the investor. Such as investment terms, pictures, descriptions, physical location, capital allocation and supporting documents for the investment opportunity.
Investing can be done in two ways:
- Invest in an ongoing crowdfunding campaign
- Buy available shares from investors willing to sell
The income will come in two ways. The first is rental income and the second is the capital gains. You will start receiving rental income when a crowdfunding campaign has successfully ended and the property is acquired. If you buy shares from the over-the-counter marketplace, you will start earning rental income from the day you purchase the shares, assuming the properties has tenants.
Each investment will be exited at the end of the investment term. The capital gains are distributed at the end of the investment term.
Getting Started on BitOfProperty
Getting started on BitOfProperty is very simple. You simply sign up through their website. When you have signed up you need to enter your personal details and verify your identity. From here you deposit money and then you start investing.
You can choose to sign up via your Google account or simply create an account on the platform.
To verify your account you need national/international identification (I used my passport). The verification process took less than a day for me.
When you are verified you can start to deposit money. The money will take up to 3 days to arrive in your investor account.
How to Invest on BitOfProperty
When there are campaigns available you can enter the amount of money you are willing to invest. Using the rental income and estimated capital growth they have a calculator that shows the estimated annual income.
The investment you make in the campaigns is the crowdfunding of the properties. When the properties are successfully funded the properties will start to generate rental income (if the property has tenants). The capital gains will accrue over the time of the investment period after which it will be exited and sold by BitOfProperty. If the properties have accrued any capital gains they are paid at the end of the investment term.
When going to the over-the-counter market (their secondary market) you can find properties that you can purchase shares from. The properties are found in the same place as the investment campaigns.
After pressing the green bottom “start” you will be asked to fill out 4 questions followed by a fifth question which is just a confirmation of the 4 previous questions. The question series is based on the price you are willing to pay per share, how many shares you are going to buy, whether you will allow to partial fill orders or fill all-or-none and lastly how long your order should be on the market.
There is only manual investing, BitOfProperty has no auto-invest options, yet.
BitOfProperty Team and Organization
BitOfProperty has a founder which is formerly employed in a trading, clearing and credit administration (financial position). One of the co-founders has been in multiple project management positions.
Based on the past experience of the founders I believe they have great potential to deliver a good product. While they are young they seem to have big ambitions for BitOfProperty.
One of the board members is also on the board of many different technological companies. Given BitOfProperty is a FinTech company, having a technological adviser can only be beneficial for the platform. Another board member has a lot of presence in financial and investment-oriented businesses. Based on the advisory board I am confident that the team will be directed at a positive attitude based on the board members’ experience.
While BitOfProperty is a small platform, they are present at Trustpilot with a score of 4 out of 5. Their trustscore is 8,3 out of 10.
Currently, all the reviews made on Trustpilot are 5-star reviews and very positive. While there are only 5 reviews, it is quite positive that they are all 5-star reviews. A platform like Swaper has 5 reviews aswell. However, they are all far from 5 stars.
Is BitOfProperty Safe?
This will be an overwhelming section so hang in there, it is worth the read.
When discussing the safety of using BitOfProperty there are several aspects to cover. First, you as an investor owns a stake in the properties. You will never be able to manage the property or find tenants as you are not located locally at the properties. Furthermore, you would, of course, want insurance on the properties.
Secondly, you want the properties to be secured. However, you want it to be secure in a way where your property is isolated from other investment properties as (within crowdfunding) you would like to create your own portfolio of properties.
BitOfProperty takes care of both. First of all, BitOfProperty will do property management. It comes with a cost of 10% of your rental income. However, considering that BitOfProperty is the loan originator and there are no borrowers who can pay for the administration. Therefore, 10% seems like a modest price for a fully passive portfolio. Property management covers insurance, tenant communication, money administration, and tenant administration.
Answering to the second safety issue, BitOfProperty isolates the properties in SPV’s (separate subsidiary holding companies). Each of the investments is backed with the acquired property with the security agent holding the collateral on behalf of the investors. The security agent is a third-party law firm. Therefore, if BitOfProperty goes bankrupt the subsidiaries will still be able to make their obligations.
I told you this section was worth reading. BitOfProperty has made all the risk mitigation they can for the investors. Furthermore, they make our investments 100% passive.
Fees and Costs
BitOfProperty has only one fee for investors. The fee is consisting of a 10% management fee on the rental income. Since there are no borrowers on BitOfProperty, someone has to pay the management fees. So rather than seeing the fee as a negative, you should consider what the 10% management fee actually gives you in return.
The fee allows you to have a 100% passive investment in real estate.
Similar P2P Lending Platform
There are similar platforms to BitOfProperty. The 4 listed below are all platforms that provide real estate investments in some form. However, BitOfProperty is the only platform that offers a share in a particular property (Grupeer will introduce this option in the future). Furthermore, BitOfProperty is the only platform that offers rental income. Meaning that the real estate is actually purchased and rented to tenants. Whereas other platforms are lending to project teams and development teams for the building of the properties.
Personal Experience Investing On BitOfProperty
Currently, I have verified my personal details. I have transferred a modest €200 in August 2019 to invest in the available properties. So far the platform has been silky smooth. I will update this as my experience on the platform grows.
You can follow the income on my BitOfProperty income page.
BitOfProperty is from my point of view a very solid new platform. There is a competent team behind the platform with some highly experienced board members.
Furthermore, the concept of owning a share of the property is something that is not yet commonly seen on P2P lending and crowdfunding platforms.
If you are interested in owning a piece of property and get some rental income every month, you can sign up and invest like me.