Wholesale investors looking to make potentially more productive use of their capital have a new option.
Property is popular investment vehicle in Australia, but it can come with long-term commitment, high capital investment, sunk costs, and usually means tying up liquidity. A new, short term option for wholesale investors to invest in project property loans with up to 7% p.a. target income returns* has arrived from CrowdProperty Australia.
Investing in property
As an Australian wholesale investor interested in property, your options are:
a) Cash savings (waiting for the right opportunity) at a rate of less than 0.5 percent p.a. (based on review of online savings accounts at Australian ‘big 4’ banks on 5 March 2021)
b) Direct property investment, which has the potential to out-perform cash but comes with:
- Significant investment
- Long-term commitment with money tied up for many years
- Little liquidity in the event of an emergency
- Sunk costs
- Difficult to diversify your investments
- There are risks investing in direct real property
- Returns can be thinly spread
c) Traditional indirect investment vehicles, such as unlisted trusts, Australian Real Estate Investment Trusts (AREITs), and traditional syndicates where:
- Property investors may not get to choose the properties they invest in
- It may be difficult to diversify across property types and geographic locations
- Liquidity is typically low
The CrowdProperty alternative
CrowdProperty offers Australian investors an alternative with an opportunity to invest in property project loans without the significant investment or long-term commitment of actual property.
Wholesale investors are able to invest in a fund that provides project loans to property developers.
Investors can earn up to 7% p.a. target income returns backed by first mortgage security against property.*
Benefits for risk-informed wholesale investors include:
- Provide a higher rate of return on first registered mortgage security
- Create greater diversification of an investor portfolio — aka not putting all your eggs in one basket
- You get to assess the property projects before pledging to a project loan
- Fixed term returns of approx. six to 18 months
- Invest for return: up to 7% p.a. target income returns*
- Extesnive 53 point due diligence checklist conducted on all projects (our UK sister company has only funded 3% of assessed projects in 6 years)
- Independent valuations on every project