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Spoilt for choice? The growing diversity of property investment types

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Development Finance Today posed the following question – are there too many property investment types? This was aimed at a variety of industry professionals, and the results reveal that 65% believe that there were too many property investment platforms in the market.

Property investment platforms allow investors to invest in individual properties or a property portfolio.

CEO of Assetz Capital, Stuart Law, highlights the diversity of platforms available. “Property investment platforms have begun to sprout up over recent years in many guises. Crowdfunding, P2P lending, real estate investment trusts and bonds all feature in this market. Whether there are too many of them is a different question, and it probably comes down to whether there is a true market need for their services.”

We can see then that where a need for a property investment platform exists, there is always going to be a market for it. There are many different property types to invest in on top of this, examples including hotel room investments and student property investments.

Marc Trup of Property Management platform Arthur Online supports this, saying that “In any free market, demand attracts supply, more supply means more competition, which in turn means more options, better service and lower prices”.

However, does the amount of property investment platforms on offer make it hard for investors to ascertain how their investments should be made?

Mr Trup goes onto say that “modern consumers are overwhelmed with choice, and in the complicated world of property investment – where poor choices can lead to financial ruin – a simpler world may actually be better in the long term”.

Although there are more options available that can lead to better service and lower prices overall, the competition can confuse investors.

Co-founder of Progressive Property, Mark Homer, adds to this argument, saying “there are probably now too many property investment platforms with disparate offers. As most will look to choose a strong operation with a strong brand – consolidation with a focus towards stronger operators is due”.

There could be a point to be made that, as with many industries, things evolve to meet the demands of modern consumers and the economy at the time. Henry Smith, CEO at Aitch Group, highlights that the property market is an ever-evolving landscape with new policies and legislation emerging frequently.

“To remain dynamic, exploring new investment models is an essential part. Provided the risk is calculated – at a sensible rate and there is no overexposure – the variation of investment platforms should be sustainable.”

What we can take from this is that although there will continue to be a diversity of investment platforms to assess, it is vitally important that you have done your own research. This will predominantly involve identifying low risk investment types, but also serves to highlight the need for reliable advice if you are unsure about an investment.

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