UK Landlord Forum / Life

So, I've been a Landlord for quite some time... I've always wanted one more property to try and make my passive-ish income secure for the future. What's the challenge? Well, finding a property is always a challenge, of course - but the main one is going to remain the high barrier of entry.

Let's say, in the North, you would need to spend £100,000 to get a small terrace house that is 'ready to go' and bring you in, say, £500 to £650 rent each month.

Well, I've started to dabble in the RWA (real world asset) sector of crypto.. I'm only dipping my toe-in, but I've punted $1,000 (yes $s, not £s) into four separate properties in the US (from New Mexico to Florida) which are let. I've effectively become a fractionalised owner of these shared assets via property tokens... and I'm receiving rent, daily.

To achieve that, I had to sign a shared ownership agreement (so I'm kina like a Director I suppose) and I have to participate in the governance of the property - approving outlays for repairs, renewing lease agreements etc.. And that's all actually managed for you and you just have to vote, that's it, you don't need to get involved with Tenants, or Contractors(!) or any of the real-life nitty-gritty. And, I've not even had to vote yet - so  it's not exactly onerous.

But, still, I am receiving rent in something called USDC (which is basically a crypto. that's pegged to the $) and I have withdrawn some of my accumulated rent and turned it back into fiat currency (just to test the whole end-to-end process works). It does.

I extrapolated the numbers and figured-out if I'd spent $100,000 on these fractionalised properties, then I'd be earning over $13,000 per year... that compares quite well with £100,000 in the UK probably bringing in between £6,000 - £7,800 per year.

The daily rent that's incoming does seem to have an element of variability about it that I've not got my head around yet, but I'm still learning. It's been coming in for a few weeks now, though, and I'm so intrigued by it I've just bought four more tokens in a property in Daytona Beach - this is what they call a 'duplex' and the top 'unit' is let, the bottom one is an AirBNB.

There's some very interesting things happening out there.

I've refrained from mentioning the specific platform I'm using because I'm not advertising that in itself, and there's plenty of options in the entire space (some more mature than others). I think I will move tentatively into this space more. I am not quite ready to shift $100,000 there, but maybe $5,000 or something like that.

Interesting.

My issue is that because they're not regulated, these markets and businesses are essentially a gamble. There's no reason that they're not the start of a new stable business - Apple and Amazon would have looked like gambles day zero - but, equally no reason they're not like FTX.

And people investing in FTX could make a lot of money or lose a lot, depending almost entirely on timing.

If you have money that you can afford to lose, I guess...

I'm looking at it more as property diversification, for me. Of course, because it's fractional ownership, you can take a brief dip rather than commit to the whole bath. As the property tokens are tied to the underlying property and its inherent value, it's a thing I consider slightly less risky than the simple owning of a crypto. asset (which is extremely volatile).

A property's tokens I bought for ~$65 a week or two back are currently trading on the marketplace for $78.65, but it's the daily rent I'm interested in.

Currently, I do not have the £100,000 sitting idle to put into a UK property, and I reckon I'm done with mortgages. Ideally I'd be up for that, even taking into account the current and likely-upcoming PRS climate, but, yes, interesting is the word for this RWA lark.

As a chronic-risk averse over- thinker my first reaction was that this must be some kind of Ponzi scheme.  I Googled, and did not understand a word, but it does seem  potentially kosher and causing a lot of excitement in that mysterious world.

You are doing this from a strong financial foundation, looking at the worst that could happen and knowing you could take the consequences. I think it's a great idea, and  might give you quite a buzz. If it does not work out, so what?   It could even be quite fun ( remember fun? )

Keep us posted, I can enjoy the gamble vicariously!   

Most unusual investment schemes tend to favour early adopters. Even a ponzi scheme can be a great investment if you get in early enough!

I would suggest it's more than "potentially kosher" - even BlackRock is betting heavily on tokenisation (and has done some already).

https://www.forbes.com/sites/nataliakarayaneva/2024/03/21/blackrocks-10-trillion-tokenization-vision-the-future-of-real-world-assets/

I would rather suggest this is a, very possible, future where we won't have to worry too much about regulation etc. - that'll all be a part of it so it's not in the shadows.

Any asset can be tokenised, it doesn't have to be property. Another outfit I'm dipping into (Swarm Markets) lets me invest in various stock and has just jumped into Gold as an asset you can invest in much easier than ever before. However, I'm not doing that myself.

It reminds me of the peer-to-peer lending model that made a bit of a splash a few years ago. I can see the sense of it, albeit it feels a bit speculative at the moment.

That said, I do wonder whether people with money to invest in residential property will begin to trend away from being small landlords owning a few properties directly, towards being stakeholders in a company that owns hundreds or thousands, whether that be via conventional shares or some other instrument.

I 'had' to engage in my first form of shared ownership governance today. There's a duplex on Daytona Beach where one of the units had been used as an AirBNB with some good success - reflected in the rental returns - and the governance vote was about whether to now transition the other unit to also run as an AirBNB. I have voted yes, because - why not?

I am told: "The results will be determined by a 60% Supermajority and the results will be sent to all owners on Monday, July 22nd once the voting period ends."

The ease of influencing a decision like this, as though it is nothing at all, is remarkable.

Quote from: Hippogriff on July 16, 2024, 06:18:14 AMThe ease of influencing a decision like this, as though it is nothing at all, is remarkable.

Via the app, is there any way that you can influence the outcome of the American presidential election?

I think someone already sorted that on Saturday.

Hippogriff is surely now in real estate, a realtor?  I have always thought it sounds much more glamorous than landlord. Hope he takes us all for a nice drink when he makes his first million. 

I don't think it'll be a million... but I can happily say that rent is definitely coming in on a daily basis. That is now after a fair bit of time. No missed days. I think I could eventually turn this into something usefully passive-income-y.

If I do hit a million - I'll sort out RWA tokenised drinks.

I've faced similar challenges in property investment. Recently, I tried investing in the RWA (real world asset) crypto sector. For $1,000, I bought fractional ownership in four US rental properties via property tokens, earning daily rent in USDC (a stable cryptocurrency). This will lowers
 the entry cost and offers a good return. If I had invested $100,000, I could earn over $13,000 annually, compared to £6,000-£7,800 from a UK property. You might consider starting small, like $1,000 or $5,000, to test this innovative investment strategy.

A "stable cryptocurrency" is just a "cryptocurrency".

Don't forget that the tax on these investments is complicated because it's not easy to confirm when the return crystallizes because of the currency conversion. If you "receive" £100 of cryptocurrency units, have you earned it then, or when you convert it to actual money, when the value might be different?

I'd guess there's a prevailing opinion somewhere, but I don't know what it is.

Quote from: havens on July 17, 2024, 08:07:05 PMFor $1,000, I bought fractional ownership in four US rental properties via property tokens, earning daily rent in USDC (a stable cryptocurrency).

What platform was used? It can be mentioned, but let's all try to stay away from advertising anything.

Quote from: havens on July 17, 2024, 08:07:05 PMI've faced similar challenges in property investment. Recently, I tried investing in the RWA (real world asset) crypto sector. For $1,000, I bought fractional ownership in four US rental properties via property tokens, earning daily rent in USDC (a stable cryptocurrency). This will lowers the entry cost and offers a good return. If I had invested $100,000, I could earn over $13,000 annually, compared to £6,000-£7,800 from a UK property. You might consider starting small, like $1,000 or $5,000, to test this innovative investment strategy.

@havens - Why do you keep providing responses to many topics in this forum that merely regurgitate what other people have already said?

Here, for example, you have extracted elements of Hippogriff's original post and have presented them as though you have recently invested in four US rental properties for $1000 via RWAs and with the same earnings potential of $13,000 had you invested $100,000, and making the same comparison to UK property earnings.

Why are you doing this? What does it gain you? Are you a bot? Are you a troll?

Your answers add no value to the discussion and waste people's time.

I am not getting the impression of any actual experience of the sector we are in.This latest response is just plain bizarre.Can you tell us a bit about your background in private rentals? Most of what you say is just echoing,or Googled information.   

Not to re-start this, but to update after a significant period of time has passed...

Yes, I have continued to earn rent (paid in USDC) on the fractional properties I own.

Yes, I have participated in governance to, for example, turn one away from Long Term Rental into an AirBnB (seemed to suit the property).

And, I have also loaned out my property tokens (to who I have no clue) and get a secondary stream of USDC from that (that's variable based on who buys and sells).

Do I intend to purchase more tokens? I think I do. I'm actually at 14 now (4, 4, 4 and 2) and I think I'll move to 4, 4, 4, 4 tokens across 4 properties and then just leave them long term.

Quote from: Hippogriff on July 11, 2024, 09:49:10 AMLet's say, in the North, you would need to spend £100,000 to get a small terrace house that is 'ready to go' and bring you in, say, £500 to £650 rent each month.

I sold my late brother's 2-bed flat in Darlington for £53,000 - after a new kitchen, bathroom and carpets it was let very quickly at £600pcm

https://www.rightmove.co.uk/house-prices/details/england-141877904-19855864?s=8dc2318066696ca01e3e3027822db7b8d94a9eeedfbf25e8287923d5acf2634e#/

There ARE bargains to be had.

I would have bought it off family myself but the 6 hour drive to reach the property made it a non-starter.

I have occasionally thought of AirBnB for my studios.  What puts me off is having to go back to providing furniture and presumably even bed- linen and utensils.  I also don' t fancy having to play Mrs.  Mop every five minutes,  and risking anti- social guests upsetting fellow directors and occupants.

I would be interested to know how you get on. 

It's just governance from the collective set of property token owners, there's a proposal, a vote and the property manager handles all the ins-and-out. I just voted "yes", along with plenty of other part-owners, because the proposal seemed to make more sense for the type of property, along with location (although what do I know about Las Cruces, New Mexico?

But I know when a property comes with a hot-tub, and this one does.

Also, a popcorn machine... but that was less interesting to me... just something else to get stuck in the teeth.