Update time is upon us once again and I’m very happy with progress so far. Here’s the latest:
I’ve now completed my transactions with Ratesetter and shut down the account since I think there are better rates available with other P2P platforms.
Lots more activity this month. I added another £1000.00 to the portfolio and the interest payment for July has been made. Since I’ve got the auto invest feature switched on, this money was immediately invested in further properties (I now have funds invested in 46 properties)
Income July 2017: £65.77
Total Income to Date: £225.53
I’ve continued moving money from my normal LendingCrowd account into a LendingCrowd ISA account. This has gone well and a substantial amount has now been moved, as you can see from the balances below. The July 2017 interest payment has been included below.
Income July 2017: £3.20 – £0.30 Service Fees = £2.90 Net
Total Income to Date: £174.35 – £19.09 Service Fees = £155.26 Net
There are still 4 loans that have been put into arrears with no real movement in recovery. As long as the number of defaults remains at a sufficiently low level, then I’m happy to continue investing.
I’m now invested in 7 loans, all of them types of property or land. Interest payments to date are £75.01 and there is £11.04 available as cash for future investment. I’ve also taken the opportunity to open an account for Mrs J with a spare £125 I had. Interest payments so far are £1.36 on two loans.
I’ve now started investing in this platform, which as the name suggests is property investment based. The main difference is that you are investing in property in what are called “Special Purpose Vehicles” or SPV’s for short.
These are simply companies set up to specifically hold these types of assets and the key point is that interest and rental payments are paid out as dividends. This means that at the current tax allowances you can take £5000 in dividends (total including any you get from share ownership) completely tax free. The government are looking to reduce the amount to just £2000 but either way it is a good way to legally avoid taxation.
I’ve set up an account for Mrs J since I already receive significant dividends through a limited company and also shares that I own.
Total invested so far is £3711.19, on ten different properties and dividends of £13.78 have been received to date.
Total Holdings as at August 1st 2017
LendingCrowd ISA: £4417.43
This represents 12.07% of the mortgage outstanding of £183,364.09.
At the current point in time repayment of the mortgage would therefore be by using:
£22,126.80 from my P2P Investment Portfolio (12.07%)
£161,237.29 from my SIPP (87.93%)
Of course, I have another 9 years to alter the balance here which means increasing the value of the P2P portfolio and therefore reduce the amount needed from my SIPP.
It’s important to note that, since I am over the age of 55 then I can choose to take money from my SIPP at any time. The first 25% of this, at the date of writing, can be taken tax free. Obviously the ideal would be to take the required money (in this case £161,237.29) tax free which implies a SIPP value of £644,949.16. I don’t have that amount yet but I’m well on the way there.