What is a Property Bond?

Risk Warning: Castle Keep Bonds are provided on a non-advised sales basis only. Castle Keep will not advise or make any recommendation on the merits of this offer. The content of this brochure has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this any promotion from Castle Keep for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. Clients will be provided with the offering document from Castle Keep only and must make their own investment decisions and/or seek independent advice. Past performance is no guarantee of future results.

Property bonds are a great vehicle for property investment. However, investing in something that you do not fully understand is not only daunting but ill-advisable. For that reason we have put together this easy-to-use guide to help you fully understand property bonds and allow you to make an informed decision about whether or not they will meet your investment goals.

What is a bond?Put simply a bond is a type of secured loan agreement. An investor ‘loans’ a sum of money to the bond issuing company in return for a pre-arranged benefit. The company then use the funds to expand their business and the profits from the business are then used to repay the bond holders according to the agreed bond conditions.

In the case of property bonds, the bond issuing company use the money to purchase and renovate property before selling it on or renting it out. While each individual bond varies in its structure, the majority of bonds are repaid after a fixed length of time along with a pre-arranged percentage profit on top.

Why would you not just invest in property yourself?Property bonds allow investors to gain exposure to the property market which is easily accessible to most investors anyway. However, investing in property through a property bond has a number of key advantages which make it appealing to a number of investors:

9 It spreads the risk – As you are investing with a bond issuing company, your investment is spread across a number of different properties and geographies meaning that falling house prices in one location will not affect your returns.

9 It is a completely hands off investment – Purchasing and renovating property for resale is a long and involved business and requires a certain amount of knowledge and experience if you are going to be successful. Property bonds do not require you to do anything once you have invested, making them one of the most low maintenance investment options.

9 It lowers the costs – Bond issuing companies buy a large number of properties over the months and years which means that they can get properties at prices lower than those on the open market. In addition, companies can bulk buy materials for renovation meaning that savings can be made here as well.

9 You have guaranteed returns – The bond issuing company are bound by law to meet the terms of the bond. This means that you don’t have to worry about what you will or will not make from your investment.

9 It opens new markets – Buying a property bond allows you access to foreign property markets without the need to manage it from abroad.

Castle Keep’s property bond is focused on US real estate which is currently seeing steady growth due to the country’s recovery and a number of other socio-economic factors. While US property is widely seen as an attractive market to invest in, property investment from abroad is a very tricky business. Foreign owners of US properties need to:

9 Register for and pay US tax on rental income

9 Pay property tax

9 Pay HOA fees (if applicable)

9 Set aside rental income to cover the future voids, maintenance and renovations

None of this is necessary however if you are investing in the US property market through a property bond purchase.

Risk Warning: Castle Keep Bonds are provided on a non-advised sales basis only. Castle Keep will not advise or make any recommendation on the merits of this offer. The content of this brochure has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this any promotion from Castle Keep for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. Clients will be provided with the offering document from Castle Keep only and must make their own investment decisions and/or seek independent advice. Past performance is no guarantee of future results.

How secure are bonds?Bond issuing companies are obligated to hold investor funds against tangible assets and have a large number of processes and procedures in place to protect investor funds. Bonds have a number of similarities to stocks however, the major difference is that stocks are an equity stake in the company whereas bondholders have a creditor stake in the company (i.e. they are lenders). Being a creditor means that bondholders have priority and will be repaid before stockholders in the event of bankruptcy.

All of this means that investing in bonds is incredibly secure. It is this security that lures so many investors away from stocks and from investing in property themselves. Any experienced investor can easily find out the yields available through property investment, but they will then be at the mercy of the market. Investing in bonds means that you are guaranteed the returns stated in the terms of the bond.

Key points of Castle Keep’s property bonds:

9 Bonds are hands off investments. Once you have invested your money, there are no other considerations and nothing more to be done except collect your returns.

9 There is no need to register for, file or pay US taxes

9 Gain access to a booming US property market with a quick and simple investment option

9 Achieve definite, guaranteed returns as set out in the terms of the bond

9 Receive twice yearly interest payments

9 Low risk investment option

9 Invest in property for a very low initial outlay

9 Receive higher yields through access to lower cost housing and renovation materials

To invest, please contactCastle Keep71-75 Shelton StreetCovent GardenLondon, WC2H 9JQ

Tel: +44 0207 030 3227Email: info@castle-keep.com