Scientists have never investigated the existence of a property gene but if they do they will find compelling evidence in the Ahmed family.
Their Leeds-based Parklane Properties empire began with Nazir Ahmed, who landed in Leeds in the mid-1970s after fleeing east Africa during the Idi Amin era. Keen to find work as an accountant, his skills were not transferable and racism was rife, so he bought a grocery shop and put his head for numbers to good use.
Well before buy-to-let became mainstream, Nazir calculated that if he used his savings to buy a cheap back-to-back as a short-term family home, he could afford another house to let. After building a large portfolio of student properties, he passed the baton on to entrepreneurial son Naveen and his brothers Nadeem and Sameer, who created the Parklane brand, opened a lettings agency, constructed purpose-built student accommodation and launched the Roomzzz chain of hotels.
Now the third generation, Naveen’s sons, Shaan and Haaris, have launched their own property company, backed by Parklane. UOWN is a crowdfunding venture aimed at those who want to invest in bricks and mortar. One of its main boasts is that it democratises home ownership by offering a share in a house for as little as £20.
Property crowdfunding is a relatively new concept that is gaining ground. It uses investors’ cash to buy property and promises an affordable and hassle-free way of buying-to-let. Each property is a limited company that you buy shares in, which should ensure that if the umbrella business fails, you don’t lose your stake. While there are reputable players in this nascent industry, caution must be observed as there is plenty of scope for poor practice and scamming. Even if the venture is legitimate, one of the big issues can be cashing in your shares and getting your money out.
Shaan, 26, a graduate of the London School of Economics, and Haaris, 23, an Oxford graduate, aim to simplify the process and provide reassurance. Their business model involves sourcing a property for sale and finding crowdfunders/investors to finance the cost. These investments are set aside in a secure client account so everyone gets their money back if the purchase price isn’t met. If it is then the property is bought. Buyers are charged a two per cent fee on every share they buy and there’s an annual 0.5 per cent administration fee on the value of the building.
Investors get their proportion of the rental income each month and can cash in their share at any time by listing it for sale on the UOWN website. UOWN aims to sell it within one month. There are no charges and the return will take account of house price growth, or decline.
The UOWN website is upfront about the possibility of a dip in profits and carries a risk warning: “Property prices go up as well as down, so you might not get out what you put in. Our forecasting tools help with the guesswork but they don’t always get it right. Like all humans, we can’t predict the future.”
The Ahmed family strategy of investing in high-yielding student lets and shared houses should help provide a solid rental return and Shaan and Haaris believe that the first crowdfunded properties in Headingley will also see good capital growth. They predict an overall 54 per cent return on investment over five years.
Shaan says: “Our family has been really lucky to benefit from property investment and it now provides income and security to three generations. We have put our headstart to good use, so that other people have a chance to invest.”
They are hoping to appeal to young people who are struggling to get on the property ladder and, so far, investors include young people who have pledged the minimum £20, along with others who have invested £5,000.
The start-up is buying property in Leeds, where it can access the Parklane infrastructure and lettings service, but the Ahmed brothers are also planning to expand UOWN’s reach to Manchester and London.
“We’d also like to crowdfund to build homes to let,” says Shaan. www.uown.co