Direct2property is Ireland's first trading platform for residential property, allowing investors to take a view on individual property assets, diversify their portfolio and manage their market exposure at the click of a button.
Residential property is a popular investment with a strong track record, but it is not always easy to access. Our purpose is to bring accessibility, simplicity and liquidity to this asset class.
Direct2property allows you to invest in residential property, earn monthly income from rent and sell your investment on the Resale market.
On Direct2property you have a choice between New Listing (primary market) and Resale (secondary market) investment opportunities.
"New Listing" opportunities are properties for which we have negotiated an option to purchase at an agreed price. The funds to purchase these properties are live funded on our platform within a specified time period.
New Listing opportunities are presented on the platform along with a Chartered Surveyor"s valuation and survey, solicitor"s conveyancing report and forecast rental information.
When you commit funds to a "New Listing", your Direct2property account balance will decrease but no money will actually leave the client monies account until the live funding target is reached.
In the unlikely event that a new listing does not reach its funding target within the specified time, either Direct2property will make up the difference using our own cash (for example, if the difference is very small) or the funding process will fail and the property will not be acquired. Where the funding process fails, all committed funds will be released in the respective customers" accounts i.e. the funds will never leave your customer account. This applies to 100% of committed funds - Direct2property will obviously not charge or receive any fees and any costs that have been incurred (for example, surveyors and solicitors) will be borne solely by Direct2property.
All "New Listings" are available in "Pre-Order" mode for a set period of time, with the remainder (if any) moving to a live funding process thereafter.
Pre-order ensures a window of at least several days for everyone to participate in a New Listing, meaning you can digest the information in your own time and won"t miss the opportunity to invest. You will also be able to see the pre-order closing date in each property page.
So long as you invest in the Pre-order period you will not miss out on the chance to invest, but to accommodate everyone fairly we may need to scale-back orders if they exceed the Funding Target for a New Listing (see below).
Scale-back may be applied if pre-orders are oversubscribed. When investor commitments exceed the Funding Target for a New Listing, your commitment may be reduced on a pro-rata basis. For example, if the funding target is €1,000,000 but we received pre-orders amounting to €2,000,000 (excluding fees) then you would receive 50% of your initial order.
"Resale" opportunities appear on the platform when another Direct2property investor chooses to sell their investment.
The selling investor can choose the price in which they offer their shares for sale, but we will provide information to help both potential buyers and sellers to perform diligence, and determine whether they wish to buy or sell at a given price.
In addition, we provide an updated estimate of the valuation of each property each quarter. SCSI accredited surveyors carry out revaluations of all our properties on a quarterly basis and we update the valuations on or about the 5th of January, April, July and October. A comprehensive Chartered Surveyor"s physical inspection and valuation is completed every five years in connection with the 5 year exit mechanic.
However, ultimately it is your decision what price to buy or sell at. Our estimated valuations do not constitute, and should not be considered, investment advice.
Direct2property reserves the right not to list an investment for sale and to decline investment requests via its platform at its sole discretion. In addition, all customers must classify as sophisticated, high net worth or restricted investors and, until you have done so, nothing on our site is intended as an offer capable of acceptance by you or us.
Your investment in property on the platform is made via the purchase of a beneficial interest in shares in a ROI Limited Company, established specifically for purchasing that individual property.
It is not possible for more than four people to be listed on a ROI land registry deed, as such each property listed on Direct2property is owned by a special purpose vehicle ("SPV"), which is a ROI Limited Company, in which you can acquire a beneficial interest in shares. There is a different SPV for each and every property; therefore, you will always know that you are investing in a specific property chosen by you.
The maximum number of shares that you can purchase in any property is 199,900 which is equivalent to 19.99% of the SPV. The cap on percentage ownership is to ensure no individual owns a beneficial interest greater than 20%.
Your shares are held under a nominee arrangement, with the nominee being the legal shareholder of the relevant SPV. The nominee holds those shares on your behalf and you will be entitled to all the economic benefits as the ultimate beneficial owner. The nominee is a ROI Limited Company wholly owned by Direct2property called Direct2property Nominee Limited. The purpose of this arrangement is to facilitate the electronic transfer of shares and for ease of administering operations as set out in the management contract, and it is a widely recognised approach for doing so.
As with buying property directly, purchase costs such as stamp duty, solicitor"s fees and survey costs are incurred. These costs are funded by the amounts raised from investors and shown on the platform before you make an investment. We amortise these costs over 5 years, which means we spread the costs over that period. We include the unamortised amount within the estimated valuation of investments i.e. the shares in property SPVs.
At the point of investment, you will be required to agree to a set of investment documents. These are standard form for each investment and sample documents can be accessed from your Dashboard on the platform.
After a customer sets up a Direct2property account, we complete an identity verification check. This is an essential part of our due diligence process, and is something that"s required by our regulator, the Financial Conduct Authority (FCA) for all customers.
In the event that we are unable to complete the identity verification check electronically, we may ask that you provide two identity documents that may also need to be certified by an independent professional. Whilst we appreciate that this is can be an inconvenience, our objective and intention is ultimately a benefit that protects both our customers and ourselves.
When you buy a share in a property (through an SPV), you never need to worry about letting or management of properties. Direct2property takes care of this on behalf of the investors.
The SPV which acquires the relevant property enters into a management agreement with Direct2property, which in turn delegates property management decision-making and authority to a letting and management agent.
To facilitate this, we charge 5.5% + VAT per annum of Gross Rent, which includes both advertising, letting and managing the property but excludes certain costs such as maintenance (consistent with industry practice).
In certain situations, we may charge a lower amount. For example, we might do this if the property is rented by long term tenants under an Assured Periodic Tenancy. Direct2property uses local agents to perform much of the advertising, letting and management services and pays for these third party costs out of the 5.5% + VAT fee, meaning this is generally only a breakeven activity for Direct2property.
You beneficially own a portion of the individual property via a specific ROI Limited Company, (the SPV). You will receive a share of the Dividends from the SPV every month, in direct proportion to your ownership of the SPV that owns the property.
The Dividends available to property investors are calculated as the Gross Rent collected from tenants, minus property-related costs including: purchase costs, furnishings, cosmetic remedial works, forecast maintenance, annual voids, corporate taxation, all fees and mortgage interest payments (for geared properties).
Under no circumstances will you be required to contribute further capital, e.g. during vacant periods or to cover defaults.
Estimates of future Dividends are provided prior to you making an investment. These estimates are based on consultation with third parties, such as local estate agents and surveyors. We then apply estimates for void periods, on-going maintenance, and any other costs we envisage as per the above. Our estimates are available for review as part of the investment process. However, it is important to note that this information is based on estimates and Direct2property does not provide investment advice in this regard. It may be that lower Gross Rents are secured and/or higher costs incurred.
Every property has a different projected dividend yield and every property has different opportunities for capital growth as well.
As an example, ?If you invested €10,000 in a property on the platform with an estimated dividend yield of 3.05%, you would expect to receive €305 per year in dividends (i.e. €10,000 x 3.05%). This would mean an estimated income of €25.41 a month, which would be paid directly into your Direct2property account. You are free to then reinvest or withdraw those funds.
Any capital gains would be in addition to this dividend yield. The combination of income, capital gains and our charges would give you a total return.
Each property page has a Calculator to help you calculate your total returns based on different scenarios.
The calculator will show estimates of:
Your share of Dividends will start accruing from the date the property is purchased, or a later date if specified in the property description. Dividends for any given month will be paid on the 5th of the following month, directly into your Direct2property account. If the 5th of the month falls on the weekend or a bank holiday, dividends will be paid on the next business day.
The first payment will typically follow the first full month from purchase - for example, if a property is purchased on 15th December, the first disbursement will be on 5th February for the period 15th December to 31st January.
In addition, we provide an updated estimate of the valuation of each property each quarter. SCSI accredited surveyors carry out revaluations of all our properties on a quarterly basis and we update the valuations on the 5th of January, April, July and October (if this falls on a weekend or bank holiday, then the next business day) so that you can monitor any capital returns. All of this will be presented through your personal dashboard on the platform.
We email you once the property you have invested in has successfully been funded. You will then receive a monthly email notifying you that dividends have been received on your investments.
You can also log into your dedicatted online account and track your investments and returns at any stage.
No, investors will not have to contribute further capital. All costs including bills and fees are funded from the Gross Rent. The risk of the largest unexpected costs, such as flood or fire, are mitigated through property insurance.
We also forecast certain costs, such as upcoming roof maintenance, and either (i) raise a works provision during the initial crowdfunding when the property is a New Listing or (ii) set aside a certain amount of the Gross Rent to deal with these costs as and when they arise. We make all of this information available to investors at the point of investment. If further information relating to costs becomes available later, we will communicate this clearly via our website so that all Investors (current and prospective) are aware.
It is possible that a cost is incurred that is larger than Gross Rent, and may be unexpected and also uninsured. In such a scenario Direct2property reserves the right to take out a loan which is secured against the property, to fund the expenditure. That loan is repaid from Gross Rent, and this impacts the investors" returns accordingly. If this situation were to occur, the matter would be communicated clearly to existing and prospective investors alike in a clear, fair and transparent manner.
Capital appreciation or depreciation is realised when you exit your investment. There are two principle ways to exit:
You can do this at any point. You can choose the price at which you offer your investment for sale. Your investment is then listed as a "Resale" opportunity to other investors.
We provide you and prospective purchasers of your investment with an estimated valuation (on a per share basis) which is updated every quarter from independent SCSI accredited surveyor valuations. And, of course, you"ll be able to see the prices at which previous shares in that property have traded, as well as the prices currently being bid by prospective buyers.
Ultimately it is your decision what price to buy or sell at, our estimated valuations do not constitute, and should not be considered, investment advice.
Depending on the price you are offering your investment for sale, the opportunity may or may not appear attractive to prospective buyers (and therefore may or may not sell). You can adjust the price to make it more attractive to buyers. However, there is no guarantee that anyone will be willing to buy your investment from you, whatever the price. In this scenario your opportunity to exit is limited to (2) below.
On each fifth anniversary of the completion of the transaction on the platform, each investor in the property has an opportunity to sell their holdings at fair market value. This process is outlined as follows:
If this process is unsuccessful for whatever reason, Direct2property will commence proceedings to sell the underlying property. The property will be advertised for sale on the open market at the valuation determined by the Chartered Surveyor. Direct2property will administer this process and is obliged to act in the interests of investors to maximise financial return. On successful completion of the sale, all Investors in that property will be exited and net proceeds will be distributed to investors. Note that third party costs, such as legal fees, will reduce the proceeds available for distribution to investors, but Direct2property will not charge any fees or make any profit margin on the third party fees.
It should be noted that if the underlying property is sold, this process will take as long as required and typically the sales process is between 3-4 months. However, there is no guarantee of this as the sale could take longer.
When purchasing shares on the Resale market a 2% fee applies, same as with our New Listings properties. There are no fees upon successfully selling shares.
When you purchase shares on the Resale market you are automatically offered the cheapest shares first until the amount of shares proportionate to how much you want to invest have been purchased.
Yes, the shares you have offered for sale can be delisted, adjusted and relisted at anytime up until the point another customer opts to buy them i.e. if you list them and someone accepts that price and acquires the shares the transaction is complete and you cannot unwind that transaction - however you can delist or adjust any time up until that occurs.
You will still receive monthly dividends for the shares you have listed for sale as long as you still own them on the 5th of the month when the rent dispersal is paid.