Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
- You could lose all the money you invest
Property prices can go down as well as up and different property types or those in different areas may be more or less susceptible to reduced or negative growth.
There is a risk that you may not get back what you put in if property prices fall. You should not invest more money through the platform than you can afford to lose without altering your standard of living. - You won’t get your money back quickly
Any investment you make through the platform will be highly illiquid. There is no market for these shares, and you must be prepared to hold the investment for the full term.
The property market can change, it may be difficult to sell the property at the targeted exit date and you may need to hold the investment for longer than the expected term. - Don’t put all your eggs in one basket
Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. https://www.fca.org.uk/investsmart/5-questions-ask-you-invest - Dividend Risk
If a property receives rent this will be paid to the investors as a dividend net of any fees, costs and expenses. However, there may be times when the property is untenanted, and no rent is collected or when the costs of maintaining the property are higher than expected. Estimated returns are not guaranteed and are subject to risks such as sales completing on time, repairs and refurbishment, tenant risk and other costs. Lower rents may be secured, tenants may not pay their rent and properties may be untenanted for periods. Other events could also have an impact on returns (for example if a fire were to occur which was not covered by insurance). Where such costs are not covered by rents we reserve the right to obtain a loan secured against the underlying property to pay for repairs, administration and any other ongoing costs. This loan will need to be paid down by future rental income. Estimated returns are not guaranteed and are subject to risks such as sales completing on time, repairs and refurbishment, tenant risk and other costs. Lower rents may be secured, tenants may not pay their rent and properties may be untenanted for periods. Other events could also have an impact on returns (for example if a fire were to occur which was not covered by insurance). Where such costs are not covered by rents we reserve the right to obtain a loan secured against the underlying property to pay for repairs, administration and any other ongoing costs. This loan will need to be paid down by future rental income. - You are unlikely to be protected if something goes wrong
Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here. https://www.fscs.org.uk/check/investment-protection-checker/
Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here. https://www.financial-ombudsman.org.uk/consumers.
If you are interested in learning more about how to protect yourself, visit the FCA’s website here. https://www.fca.org.uk/investsmart For further information about investment-based crowdfunding, visit the FCA’s website here. https://www.fca.org.uk/consumers/crowdfunding
