Buy-to-let investors can pool together

Xolile Bhengu

Xolile Bhengu

Investors in the buy-to-let market may find pooling helpful to minimising risk.

Recent bank surveys have discovered a decrease in demand for property investment. One noted a drop to 12percent in the second quarter of this year from 30percent in the same quarter three years ago.

The plunge has been attributed to continued interest rate hikes and the introduction of tougher laws such as the second phase of the National Credit Act, which came into effect in June and has made banks stricter on lending.

Two companies are claiming to have found a solution to ensuring investment returns, and say you never have to meet the tenants.

Upstream, a new entrant in the buy-to-let market management business, is unlike a conventional estate agent, but can be described as an additional mediator between landlords, tenants, estate agents and banks.

It guarantees continued rentals even when a unit is empty. Investors obtain a contract of between 24 to 60 months through an agent, which has a minimal 25 day waiting period.

Similar letting ownerships are pooled together and rent payments are paid for the units even if when they are empty.

Sirius Financial Services is a property investment facilitation company. It charges a 4percent finder's fee and a monthly 10percent management fee, and offers a rental loss pool.

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