Property Club Charges
The following property club charges may be applied by a property club when acting for it's members:
• Sourcing fees, for finding the property and will generally be around 2% + VAT.
• Valuation fees - these will be the amount as charged by the mortgage company.
• Legal fees - Remember that the legal fees charged will mean that you will be paying YOUR solicitor. Although the solicitor recommended may be the scheme's 'preferred' solicitor, they are in truth your solicitor. The property club ought to have their own solicitor to instruct your solicitor although oftentimes this may not be the case - this would be for the ultra cautious property club, whose charges would have to reflect these inceased costs to their clients.
• Finance charges may also be incurred if the investor group uses the services of a third party mortgage broker. These charges can be around 1% of the cost and it should be bourne in mind that some clubs may receive a commission from these financial intermediaries.
• Furnishing fees: Part of the package offered may also be where furnishing of the property also occurs. This can also represent an opportunity for the club to earn over the odds.
Remember, if you can get a rent that pays the mortgage, you're doing well. However, not all property investments will do that initially as an investor may be planning on making a capital gain in a regeneration area.
All the above 'chargeable events' may genuinely represent good value for money for the investor and like in so many cases when buying a package, genuine savings can occur in generally time invested. However it may be that the investor / landlord may be better off by arranging the above fees themselves. Everyone has a choice. Caveat emptor - Buyer beware!
Return from Property Club Charges to Property Clubs