Ways to invest in real estate
One of the exciting aspects of property investing is that you don’t have to be
Property schemes, also known as managed property funds, let you pool your money with other investors to buy a stake in an investment run by a professional manager.
In most cases, property schemes invest in commercial buildings like major office blocks, warehouse complexes, factories and shopping centres – assets that most of us simply couldn’t afford to buy as an individual investor. Some of these schemes are listed on the stock exchange and they might be easy to buy
Investors don’t directly own the property purchased by the scheme. Rather, they buy ‘units’ (a bit like shares) in the
As a unitholder, you don’t wear responsibility for maintaining the properties – this is taken care of by the fund manager. The flipside is that you don’t have a say in which properties should be bought or sold. If you’re happy to be an indirect investor these schemes can be a way to gain access to the commercial property market even if you don’t have much cash to invest.
It can be a smart way of getting a toehold in the market when you can’t afford to buy in your preferred neighbourhood.
Making the decision to
If your funds don’t stretch to investing on your own, the solution could be co-purchasing.
Teaming up with one or more investors can boost your buying power. It’s also an opportunity to spread the ongoing costs of the property across several co-owners, potentially making a rental investment more affordable.
Nonetheless, there are issues to sort out at an early stage – like how much each co-purchaser can afford to chip into the property, and how the rent and property-related expenses will be divvied up. Once you have agreed on the basics, it’s sensible to have a co-ownership agreement drawn up by your solicitor. Having guidelines in place that cover all the what-ifs, can give your fellow investors more confidence to put money on the table.
From here, it’s a matter of finding the right loan. It may be possible to take out a single loan with multiple borrowers. Some lenders offer ‘property share’ loans that let individual owners take out a loan in their own name to fund their stake in the property. Your Aussie Broker can explain what’s available for your co-purchasing arrangement.
When you know how you want to invest in real estate, let an expert Aussie Broker sort out the home loan that suits your strategy.
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- Chapter One : Things to consider before investing in property
- Chapter Two : Determining where to invest
- Chapter Three : Investment properties by dwelling types
- Chapter Four : Finance for your investment property purchase
- Chapter Five : How to invest in property
- Chapter Six : Adding value to your investment property
- Chapter Seven : Positive and negative gearing
- Chapter Eight : Getting your loan
- Chapter Nine : Selling your investment property