INVESTtoRENT 5% p.a. Bond
InvestToRent is a new PLC set up to purchase a portfolio of entry level homes for buy to let, for a period of 5 years.
Investors benefit from 5% interest per annum paid quarterly and a share in the profit following resale of the houses in 5 years time.
The intention is to find tenants (would be first time buyers) who would like to purchase "their" house in 5 years' time, with no obligation.
Whilst we will utilise a standard 6 month AST, the tenant knows we will sell in 5 years and would like it to be to them. They can feel more comfortable about laying down roots and turning this house into "their" home.
Rent is insured via a rental guarantee policy and cash is set aside to cover any rental void. We would only increase rents if the economic climate dictates that we must, this reduces financial pressure on the tenant and facilitates saving for a deposit.
We believe this helps our tenants to become first time buyers - in short, our proposition creates a housing ladder.
What could 10 000 invested in INVESTtoRENT earn?*
The typical high street bank cash ISA rate is based on a 1.5% per annum interest rate where by interest is compounded once per year. Interest rates are based on 1 year fixed accounts over the last five years using data from the Bank of England.
The INVESTtoRENT 5.00% p.a. Bond is calculated using 'simple' interest over the full 5 year term. The 20% of the profit share will be based on the increase in the net asset value of the property portfolio at the time of redemption of the bond.
All figures are rounded to the nearest Pound. This calculator does not deduct any fees or taxes that may be payable. Past performance is not a reliable indicator of future performance and an independant financial advisor should always be consulted prior to investment.
The fact remains that, whether it's as a stepping stone to home ownership or a longer-term lifestyle decision for tenants, the rental sector is an increasingly important part of the housing mix.
Foundation Home Loans marketing director Jeff Knight