Buy-to-let property exchange launched
Opromark: invest in property for as little as £1
Wednesday, 15, Jun 2005 11:29
A revolutionary online property exchange that will open up the buy-to-let market to small inventors was launched in the UK on Tuesday.
Opromark allows investors to buy and sell shares in individual properties for as little as £1, opening the market up to small investors without the cash to buy properties to let outright.
Investors can spread the risk by buying small amounts of a number of different properties, and then make money through dividends in the form of rental income and capital growth if the share price rises.
The exchange is the brainchild of Andrew Black, who founded online gambling firm Betfair five years ago, which is now believed to be worth up to £100 million.
Opromark chief executive Stephen Kenny said: "Opromark opens up the buy-to-let market to a broader range of investors, including those struggling to get on the housing ladder, by making the minimum investment £1 and ensuring that investors can diversify their investment cost effectively across a range of residential properties."
At its launch yesterday, there were only 18 properties on the company's database, but the company expects this to increase significantly in the coming months.
The way the exchange works is as follows. Sellers come to Opromark with a view to selling their property. The property is then displayed on the site for members to view and reserve.
Once there is sufficient interest in the property and the seller commits to the sale, Opromark investors can subscribe for shares in the property. When the share offer is fully subscribed, the sale will complete as normal - with Opromark charging a completion fee of one per cent of the property value.
The properties on the site are owned by a Single Property Company (SPC), which is entirely owned by Opromark members. They are managed by a property professional, who acts as the director of the SPC and among other things is responsible for the management of agents who let the property on your behalf.
Share price will be governed by how much members of the exchange are willing to buy and sell shares in a particular property for, which will be reflected by its annual valuation, rental yield, market sentiment, or changes to the property itself.
No investor will be allowed to own more than ten per cent of an individual property, but if they do they will be forced to make an offer for the rest of the property's shares.
Investing through Opromark is currently limited to properties within the UK, but the company is planning to offer overseas property in the near future as well.
Opromark is free to join, but investors are charged every time they time they trade.
For more information see: www.opromark.com.