Property Investment Clubs (PICs) 

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In recent years investing in multiple properties, often large estates have become popular among property investors. Property investment clubs involve a group of people who pool their resources and together purchase significant segments of property, in particular, new developments such as off-plan flats. They can also include overseas properties.

You may have to pay membership fees such as a fixed annual sum and a monthly subscription to join. The figures vary depending on the type of investment club you choose and the scale of properties that they invest in. So it is worth checking a few if you are considering joining one.

Advantages of joining property investment clubs:

• You do not have to raise the full sum of expenses on your own - and the financial leverage provided by a property investment club gives access to large scale properties which in turn enhance your potential return*. So a collective sum of capital could enhance your profitability significantly than if had you approached the market on your own*.
   
• Increased negotiation power - Developers of large estates that contain multiple properties such as flats are more inclined to accept a full offer in a single sweep than slowly reach their financial target through selling individual flats over a period of time. Also, clubs tend to make their purchases before the estates have even been constructed, sometimes even before they are released to the general public, which is also a highly attractive offer for a developer. 

For this reason, property investment clubs have greater negotiating power which often results in discounted prices to the market value. This means that there is a greater chance of profit if your club were to sell immediately.

As with most investments, there are risks. There are risks with being involved with groups of investors and with the property trade. New members are required to meet certain criteria for entry to the club. But potential risks include members pulling out of deals at the last minute resulting in the remaining members having to increase their financial input to make up for the loss of investment which may put financial pressure on you or force you to also pull out. There are also risks of fluctuations in the property business cycle.

It is recommended that you thoroughly research the policies of property investment clubs before committing your finances. If you are investing abroad, you must look into the relevant regulatory and tax issues to ensure compliance to safeguard your hard-earned cash.

With the right knowledge and professional advice into the risks and their possible implications, legal and tax issues and the potential costs, there is no reason why you shouldn't be able to reap the high rewards associated with property investment clubs.

* Please note that this depends on the market conditions at the time.

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