Property investing is often seen as a solo journey, which can make it hard for budding investors to know the ideal way to enter the market. There seems to be so much personal risk, time and effort expended for what may not generate a return and could even result in financial hardship.
However, as the industry evolves, this doesn’t have to be the case – and any potential downsides can be minimised through low-risk platforms, where an investor doesn’t have to put all their eggs in one basket.
By backing a diversified portfolio focused on long-term capital growth through a crowdfunding platform, investors can create and build wealth in a way that slowly but surely generates returns, even if it may not lead to massive profit right off the bat.
Avestix Equity is the first company in Australia to capitalise on the crowdfunding trend so investors can invest into real property through share ownership. With a minimum investment as low as just $500, prospective investors can purchase shares in a $5 million portfolio composed of debt-free property; as early as the second year, they will also be able to share in dividends generated from the net operating profit of the portfolio.
“The company will initially own 15 townhouses debt free, and our aim is to build Avestix Equity into a substantial landlord company over the next 7-10 years,” says Avestix founder and CEO Susan Lindeque.
The business models itself after German companies like Vonovia SE and Deutsche Wohnen SE, which build large portfolios of residential properties for long-term gain, catering to the growing popularity of renting rather than buying a home.
The portfolios diversify over time in terms of location, which helps to limit risk for investors, who also don’t have to individually take on the typical and ongoing landlord responsibilities of sourcing and managing tenants, maintenance and holding costs.
Moreover, Avestix Equity being designated as a real estate corporate owner means that investors are regarded as proper shareholders – putting them under the umbrella of corporation law protection and giving them a direct claim on assets.
The first portfolio holding is set to be in Dakabin Crossing, located within the growth region of Moreton Bay, around half an hour north of Brisbane.
“Unlike other crowd funding opportunities, where it’s all speculative with nothing really underpinning the investment from day one, this portfolio is backed by millions of dollars worth of real, tangible property assets – and investors have the opportunity to get in from such an affordable entry point,” explains Income2Wealth director Paul Wilson.
“We’re looking at around a seven-year term initially, and there will be exit strategies throughout that period as well if the investors need to get their money out..” The long term vision of Avestix Equity is to grow the company to a $50 million property portfolio.
Less experienced investors can buy in for as low as $500 or up to $10,000, whereas sophisticated investors are not given an upper limit, in accordance with legislation.
Paul Wilson from Income2Wealth explains how you can be part of this revolutionary investment opportunity.