Halal finance: Property investment the halal way

Summary

In this video, the speaker shares their background in property refurbishment and announces plans to re-enter the property investment market. They explore various property investment options, including traditional DIY approaches, property crowdfunding platforms, and Sharia-compliant financing. The video emphasizes that property is a stable investment, offering decent yields and inflation protection. It also highlights the importance of assessing risk and investment amount when choosing the best strategy. The speaker intends to dive back into property investing through the DIY route, leveraging their hands-on experience.

Takeaways

• 🔌 The speaker has a background in electrical work and property refurbishment and is considering returning to property investment.
• 🏠 Property is considered a stable investment because it is backed by tangible assets and can provide rental income, making it a good hedge against inflation.
• 💼 Property crowdfunding platforms, such as Yielders in the UK and Smart Crowd in the UAE, allow investors to pool funds for property investment, making it accessible with minimal upfront cash.
• 💸 These platforms typically charge management fees, and while they offer higher returns, they also come with increased risks, so diversification is advised.
• 🏗️ Alternatives like Intro Crowd invest in land development, while fixed-income instruments backed by property, such as those offered by Godwin, provide different investment strategies.
• 🔨 DIY property investment can be rewarding, though it requires learning through multiple projects and involves more direct management.
• 💡 Property is a diverse asset class with various entry points and risk profiles, and investors should determine their investment amount and risk tolerance.
• 📊 For portfolio diversification, many investors aim to allocate 30-60% of their portfolio to fixed-income assets, with property being a key component.
• 💷 For investments under £50,000, options include crowdfunding platforms or fixed-income instruments, while DIY investing becomes viable with larger amounts.
• 🏦 Sharia-compliant financing allows leveraging Islamic mortgages for buy-to-let and commercial properties, enabling portfolio expansion with less initial capital.

Q & A

What was the speaker's initial career training?

The speaker initially trained to be an electrician during their gap year and worked on commercial and residential properties.

Why does the speaker consider property a great investment class?

The speaker considers property a great investment because it is backed by a tangible asset, offers stability, generates rental yields, and serves as a hedge against inflation.

What are property crowdfunding platforms, and how do they work?

Property crowdfunding platforms allow investors to pool their funds to buy properties that would traditionally be accessible only to institutions. Investors earn returns proportionate to their investment when the property is rented out or sold.

What is a potential downside of using property crowdfunding platforms?

A potential downside is that these platforms charge a management fee, which reduces the final amount returned to the investor. Additionally, higher returns come with increased risk.

What are some alternative property investment strategies mentioned?

Alternative strategies include investing in brownfield and greenfield sites through companies like Intro Crowd and Summer, or investing in fixed-income instruments underpinned by property, such as those offered by Godwin.

What are the advantages of the DIY approach to property investing?

The DIY approach allows investors to retain a larger share of profits, gain hands-on experience, and learn extensively about the property market, although it requires time and effort to master.

What factors should be considered when deciding to invest in property?

Investors should consider the portion of their portfolio allocated to property, their risk appetite, and the amount of money they have available to invest.

How can Sharia-compliant financing benefit property investors?

Sharia-compliant financing, such as Islamic mortgages, allows investors to leverage their money further by using deposits for multiple properties, thereby expanding their portfolio more rapidly.

What investment options are available for someone with less than £50,000 to invest?

With less than £50,000, investors might consider property crowdfunding platforms or fixed-income instruments that have underlying exposure to property.

Why does the speaker prefer the DIY route for property investing?

The speaker prefers the DIY route because they enjoy getting hands-on experience, meeting people, and understanding the property investment space deeply.