A new report by Atchison Consultants highlights how the inclusion of residential property can enhance performance in moderate, balanced and growth investment portfolios. The report recommends property as an inclusive strategy and notes that residential property, with its relatively low volatility, provides a stable anchor to these portfolio types.
The figures, which were taken over a rolling 20-year period with different asset allocations, reveal decidedly positive results. A growth portfolio with 20% to real property could be improved up to 9.6%, a balanced portfolio with 15% could have a 6.7% improvement, and a moderate portfolio with only 10% exposure could have a 3.7% uplift.
The data was drawn from the average allocation of super fund managers from the Australian Superannuation Survey produced by a number of data providers.
As for controlling asset allocation, Arthur Naoumidis, DomaCom Limited’s CEO, called the DomaCom platform “the ideal vehicle to control asset allocation in real property without the client’s need to borrow if that is deemed an inappropriate strategy. Ownership can be fractionalised across multiple properties for as little as $2,000 per property so even a $10,000 allocation can achieve diversification in 5 different types of property in 5 different geographic locations.”
“Most financial advisers work with [professional property advisers] to identify suitable assets, but DomaCom also [identifies] properties that can be crowdfunded. Currently we have a campaign for The Block, a group of high end apartments [which was] featured on the Channel 9 program of the same name. The Block apartments are substantial at 240 - 270 2m and will be sold fully furnished”.
“The reason we chose The Block is that historically these high profile properties rent at a premium rate of approximately 4.2% - 4.9%, which will be mainly tax-deferred as they have substantial tax depreciation schedules, making them ideal for investors. This season, the rental estimates are between $2,000 and $2,500 per week with depreciation schedules ranging from $83,000 to $93,000.”
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