Is bricks and mortar the only way to add real estate to your portfolio?

September 15, 2021

September 15, 2021

September 15, 2021

Is bricks and mortar the only way to add real estate to your portfolio?

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As Australian Real Estate continues on a trajectory of strong growth, we discuss how investors can access this asset class without the usual challenges.

Australia’s median house values have risen 412% over the past 25 years, so it’s no surprise real estate remains at the heart of many investors’ portfolios. But investing in bricks and mortar isn’t the only way to add real estate to your investment portfolio.

The grass isn’t always greener

While investing directly in real estate can provide strong returns and capital growth, implementing a real estate investment strategy has some challenges:

  • High transaction costs: Buying and selling real estate can be costly when you add up all the duties, legal costs, and agency fees. To recover these costs, you need to hold onto your investment long enough to generate sufficient capital growth and/or rental income. Because the market goes up and down, this could mean a holding period of many years.

  • Time horizon: If you’re an investor who doesn’t have time on your side to ride the wave of a rising market, you could miss out on the benefits of capital growth.

  • Difficult to diversify: Real estate is generally a ‘big-ticket’ item – a single asset normally costs several million dollars. This can make it very hard to diversify an investment portfolio without an institutional size cheque book.

  • Illiquidity: Unlike other investments, such as shares, it takes more time to sell real estate if the need arises.

  • Time-intensive to manage: It also takes time, energy, expertise, and cost to professionally manage a profitable direct real estate portfolio.

Real estate investing, only better

One way to get around these challenges is to invest in professionally managed real estate debt. This approach offers you the potential to insulation your investment from market fluctuations while providing access to regular interest payments.

Australia’s median house values have risen 412% over the past 25 years, so it’s no surprise real estate remains at the heart of many investors’ portfolios. But investing in bricks and mortar isn’t the only way to add real estate to your investment portfolio.

The grass isn’t always greener

While investing directly in real estate can provide strong returns and capital growth, implementing a real estate investment strategy has some challenges:

  • High transaction costs: Buying and selling real estate can be costly when you add up all the duties, legal costs, and agency fees. To recover these costs, you need to hold onto your investment long enough to generate sufficient capital growth and/or rental income. Because the market goes up and down, this could mean a holding period of many years.

  • Time horizon: If you’re an investor who doesn’t have time on your side to ride the wave of a rising market, you could miss out on the benefits of capital growth.

  • Difficult to diversify: Real estate is generally a ‘big-ticket’ item – a single asset normally costs several million dollars. This can make it very hard to diversify an investment portfolio without an institutional size cheque book.

  • Illiquidity: Unlike other investments, such as shares, it takes more time to sell real estate if the need arises.

  • Time-intensive to manage: It also takes time, energy, expertise, and cost to professionally manage a profitable direct real estate portfolio.

Real estate investing, only better

One way to get around these challenges is to invest in professionally managed real estate debt. This approach offers you the potential to insulation your investment from market fluctuations while providing access to regular interest payments.

Australia’s median house values have risen 412% over the past 25 years, so it’s no surprise real estate remains at the heart of many investors’ portfolios. But investing in bricks and mortar isn’t the only way to add real estate to your investment portfolio.

The grass isn’t always greener

While investing directly in real estate can provide strong returns and capital growth, implementing a real estate investment strategy has some challenges:

  • High transaction costs: Buying and selling real estate can be costly when you add up all the duties, legal costs, and agency fees. To recover these costs, you need to hold onto your investment long enough to generate sufficient capital growth and/or rental income. Because the market goes up and down, this could mean a holding period of many years.

  • Time horizon: If you’re an investor who doesn’t have time on your side to ride the wave of a rising market, you could miss out on the benefits of capital growth.

  • Difficult to diversify: Real estate is generally a ‘big-ticket’ item – a single asset normally costs several million dollars. This can make it very hard to diversify an investment portfolio without an institutional size cheque book.

  • Illiquidity: Unlike other investments, such as shares, it takes more time to sell real estate if the need arises.

  • Time-intensive to manage: It also takes time, energy, expertise, and cost to professionally manage a profitable direct real estate portfolio.

Real estate investing, only better

One way to get around these challenges is to invest in professionally managed real estate debt. This approach offers you the potential to insulation your investment from market fluctuations while providing access to regular interest payments.

Australia’s median house values have risen 412% over the past 25 years, so it’s no surprise real estate remains at the heart of many investors’ portfolios. But investing in bricks and mortar isn’t the only way to add real estate to your investment portfolio.

The grass isn’t always greener

While investing directly in real estate can provide strong returns and capital growth, implementing a real estate investment strategy has some challenges:

  • High transaction costs: Buying and selling real estate can be costly when you add up all the duties, legal costs, and agency fees. To recover these costs, you need to hold onto your investment long enough to generate sufficient capital growth and/or rental income. Because the market goes up and down, this could mean a holding period of many years.

  • Time horizon: If you’re an investor who doesn’t have time on your side to ride the wave of a rising market, you could miss out on the benefits of capital growth.

  • Difficult to diversify: Real estate is generally a ‘big-ticket’ item – a single asset normally costs several million dollars. This can make it very hard to diversify an investment portfolio without an institutional size cheque book.

  • Illiquidity: Unlike other investments, such as shares, it takes more time to sell real estate if the need arises.

  • Time-intensive to manage: It also takes time, energy, expertise, and cost to professionally manage a profitable direct real estate portfolio.

Real estate investing, only better

One way to get around these challenges is to invest in professionally managed real estate debt. This approach offers you the potential to insulation your investment from market fluctuations while providing access to regular interest payments.

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AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd

AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd

AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd

AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd