An alternative to direct property investment is to invest through an unlisted property fund. This capitalises on the advantages and mitigates most of the drawbacks of investing directly into the property market.
This method of investment may be particularly suitable for investors with smaller amounts of money to invest or those that prefer to have a managed exposure to the asset class. In a fund structure the asset manager deals with the matters associated with investing in property on behalf of the investor. For example: financing, property management, maintenance, improvement, etc.
For investors seeking to invest in Australian residential property, the Ironstone Residential Fund may be an appropriate investment.
The Ironstone Residential Fund invests in a portfolio of quality Australian residential properties diversified by property type and geography. The Fund’s investment strategy
- Source: utilising a research-based approach, Ironstone Funds aims to identify investment areas where the potential for income and growth is strongest.
- Acquire: Ironstone Funds’ network of experienced buyers will identify and recommend for acquisition the best value based purchase in these areas.
- Maximise: Ironstone Funds’ asset management team will ensure that all aspects of the investments are managed and optimised, such as tenancy matters and asset improvements.
Ironstone Funds does not seek to actively trade acquired properties. Its experienced asset managers will constantly review the asset portfolio so as to ensure maximum potential income and capital growth is achieved.
Why invest using a fund?
The potential benefits of investing in Australian residential property through a professionally managed investment scheme include:
- Diversification: access to a wide variety and geography of residential property investment opportunities normally beyond the reach of individual investors.
- Professional management: residential property investment is the core of our business. Property selection and management is provided by a professional and experienced investment team.
- “No hassle” armchair approach to investing in residential property, enabling passive investment in an asset class normally requiring active management.
- Gearing: access to a geared investment in residential property for investors without the need to borrow in their own right.
- No personal requirement to meet interest rate increases or unexpected maintenance bills.
- Taxation benefits are still available when investing through the Fund, however consult your tax specialist to seek independent advice.
- Reduced expense opportunity for investors on many typical property expenses such as property management, renovations, etc. These opportunities may arise from scale advantages that the Fund has due to a greater number of properties as compared to the average individual investor.
- Capital growth potential of the underlying investment through the experienced residential property portfolio selection and management processes.
- All assets of Fund are held by an external custodian company that is independent of both the Responsible Entity and the Investment Manager.
- The Fund is regulated by the Australian Securities and Investments Commission.
Compare this to the drawbacks of direct property investment
- Funds cannot normally be recovered until the individual property asset is sold.
- Often a significant capital outlay is required
- An investor’s ability to purchase a specific property asset may be constrained by their individual borrowing capacity.
- Direct property investment usually focuses on a specific individual property investment, thus diversification benefits are foregone.
Investors may invest as little as $10,000 into the Ironstone Residential Fund.
Find out more
Visit www.ironstonefunds.com.au or call us on 02 9363 2500 for more information or to request a Product Disclosure Statement
The above information is supplied by Capital 360.
Disclaimer: while due care is taken, the viewpoints expressed by sponsors do not necessarily reflect the opinions of Your Investment Property.
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