Thinking beyond traditional bricks and mortar investment strategies opens a world of opportunity, much of it available with as little $25,000 or less.
Property trusts — also known as real estate investment trusts or REITs — can be listed or unlisted. Generally speaking, a listed trust is a more liquid investment given you can buy and sell units on the ASX, while an unlisted trust might be more illiquid as the units don’t have a formal trading platform.
Andrew Thomson - General Manager
However, any trust or REIT is only as good as the assets they control and they can allow investors to own slices of suburban shopping centres, apartment blocks, office towers, Bunnings warehouses, factories and more.
REITS are a very good option for those without hundreds of thousands of dollars to spend and who are happy to give up control.
There also can be capital losses, as many REIT investors discovered during the Global Financial Crisis when the then debt-fuelled sector slumped almost 80 per cent and is still attempting to recover. So don’t put all your eggs in one basket.
Another popular option is to invest in syndicates, opportunity funds or similar style ‘crowd funding’ opportunities where Australians can gain access to a share of a property development via passive investment in a trust that then manages the project for a fee then distributes profits back to investors.
A new wave of “fractional investing” also allows people to buy pieces of a single property and share in the ownership, rental income and capital returns.
Companies such as BrickX and DomaCom are among this new breed. BrickX, for example, divides a $1 million property into 10,000 hundred-dollar “bricks” that can be sold later to other investors on its platform, however, the jury is out on these new fractional property investing models, with potential for disputes down the track when one party wants to sell and others do not.
Other cheaper options for property investors include things such as carparks and marina berths, but their resale markets can be tricky with fewer potential buyers.
Many Australians have a desire to invest in property and are looking for more affordable alternatives to a traditional investment property. There are many alternative methods out there to invest in property without taking on a mortgage and tying up large amounts of capital for the initial deposit. At the end of the day, by purchasing an investment property you are showing your faith in residential property as an asset class, by investing in residential property via another avenue (such as an opportunity fund or syndicate) – the underlying asset class remains the same, but often the risk and capital outlay is less.
CFMG Capital is helping its active investor base access a 12% annual fixed return via its CFMG Land & Opportunity Fund. The Fund provides a potential exposure to dozens of blocks of land in a subdivision or across multiple subdivision projects.
To find out a bit more about CFMG Capital and how the CFMG Land & Opportunity Fund may be a good fit for your circumstances schedule a call back with one of our Investment Consultants.
General Manager, CFMG Capital