Are property bonds safe?

As property bonds are an investment product, your capital is at risk and returns are not guaranteed. The risk level of a property bond ultimately depends on the particular bond you choose.

 

Are property bonds safe?

No form of investment is completely safe, but investments that are secured against property and land with a legal charge are considered some of the safest options available. This is because the assets can be sold to return the investors capital if the borrower is unable to pay back what the investor loaned as expected. However, holding an asset-backed bond does not mean your capital is fully protected - in the event of an economic downturn, you may not get back the amount invested.

The risk level of a property bond ultimately depends on the particular bond you choose though, as all will likely differ in their securities and terms. Before committing to a property bond, it’s important you make sure it is being offered by a reputable company - conducting thorough research to establish if they have a demonstrable track record, delivering successful projects and paying investors promptly.  

As property bonds are an investment product, your capital is at risk and returns are not guaranteed. There is a chance that borrowers could default on their loans, or only be able to pay back part of an investment. This could happen for a number of reasons, including the development company becoming insolvent, or unexpected increased costs of development.