UK Property investment is big business and provides one of the most reliable and consistent avenues for investment when compared to the higher risks associated with other classes such as stocks and shares.
Today, the emergence of property development franchises means that it’s not just the extremely wealthy that can benefit from the returns on offer across the property market, with amateur investors able to invest for less than £5,000 in some cases.
A property development franchise is a company that allows you to invest your money into either your own or the franchisor’s property development projects, allowing you to benefit from their established brand, business model and expertise, without having to go it alone yourself.
Average minimum investment cost
There are around 35 established property development franchises within the UK, with the average minimum investment they require currently sitting at £18,414.
However, which to opt for isn’t a decision that should be based purely on cost, as the expertise and advice they offer differs from one to the next and, more often than not, is limited to one particular area of the property industry.
Choosing based on area of expertise
Some property development franchises, such as Sperry Van Ness (SVN), focus purely on commercial opportunities. However, with a minimum investment of £163,000, SVN does require the highest entry fee among all of the franchises in the study, making it very much the reserve of professional investors.
Other development franchises cater exclusively to estate agencies, such as Winkworth, Hunters, and Estate Agency Franchise Group. The minimum investment required ranges between £5,000 and £50,000 and this relatively good level of accessibility means such franchises can be a reasonable option for amateur investors, as long as they don’t mind the restrictions of an estate agency only focussed platform.
Some franchises focus only on the lettings sector, including those that work in particularly niche spaces such as HMOs and student housing. Examples include Platinum Property Partners, Homeshare UK, and Martin & Co with minimum investments again ranging between £5,000 – £50,000.
There are also a number of property development franchises that spread their net a little wider to focus on a combination of estate agency, lettings, and niche sectors at the same time. A prime example of such a franchise is Belvoir.
However, with these more broad franchises, the degree of variety actually available to investors is limited at best, so this is an issue that Sourced has looked to rectify.
Sourced allows a minimum investment of just £12,500 which makes it highly accessible to amateur investors who want to trust their money to the expertise, knowledge, and experience of an established development brand.
But accessibility isn’t the real draw that Sourced offers investors. Instead, they are drawn to the fact that they can spread their investment across a vast range of sectors, including the less well-known corners of the industry such as rent-to-rent, serviced accommodation, lease option, title splits, property sourcing, refurbishment, conversions, and new-builds.
This allows them to tailor their investment strategy, spreading their bets across multiple sectors and avenues in order to generate the best returns at any given time.
Chris Kirkwood, Director of Sourced said, “While some development franchises choose to reserve their services for professional property investors who have the luxury of huge sums of money to work with, others, including Sourced, believe that accessibility is of utmost importance.
But accessibility isn’t just about the minimum investment required, it’s about the range of opportunities open to investors, as well as the support and advice required to make the right decisions.
Restricting investment to a singular corner of the property industry, such as the residential market or rental sector, can also leave you restricted when it comes to your investment strategy. This was an important factor we wanted to address within the industry, providing a platform that allows for a multi-pronged approach to investing to help maximise the returns available, even in uncertain times such as these.
So when looking to ascertain which franchise is right for you, remember that the initial cost of investment isn’t the key indicator that a platform will help you realise your goals and ambitions. Opting for the package most suited to your individual requirements is the best strategy when it comes to achieving your long-term goals.”
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