Why is private real estate debt getting so much attention?

September 1, 2021

September 1, 2021

September 1, 2021

Why is private real estate debt getting so much attention?

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In this educational piece, we explore the recent popularity of real estate debt and its merits as a good investment.

Private real estate debt has become one of the fastest-growing alternative asset classes in Australia in recent times, as investors hunt for yield in a low-rate environment. Why are these investments getting so much attention? 

How does it work?

When you borrow to buy a house, the bank usually lends you money in exchange for regular interest payments and a mortgage over your property. The non-bank 1st mortgage market (also known as private real estate debt) operates in much the same way. Private investors (you) act as ‘the bank’, providing loans to borrowers in exchange for a registered 1st mortgage over their property and an undertaking to make regular interest payments.

These types of investments are generally short-term in nature, anywhere from 3 – 36 months, so they’re not designed to deliver capital growth. What they do have the potential to provide is a regular, fixed income stream that is often higher than other fixed-income investments, such as bonds or term deposits.

Five reasons to get behind property-backed debt

  1. Your investment is secured by ‘bricks and mortar’

Each loan is secured by a registered 1st mortgage over a real estate asset. This means if the borrower defaults for whatever reason, the secured property can be sold to recover your investment.

  1. Borrowers pay a regular fixed income

Because you are the lender, borrowers contract to pay a fixed interest rate – typically between 4 – 7 % per annum, depending on the transaction.  Under the arrangement, income is paid monthly and is fixed for the duration of the investment.

"My monthly returns are really good…my overall interest rate is about 7%, which in today’s terms is outstanding. I find that every month, the distributions are made exactly as they say they will."  Current AltX Investor

  1. Returns are impacted by a more limited number of factors than other asset classes

The performance of private real estate debt investments isn’t linked to the performance of other traditional asset classes, such as equities. It is based on a specific borrower, their loan arrangement and their security. This protects your investment from the ups and downs of market volatility, potentially delivering a more stable return.

  1. Diversify your portfolio

As well as diversifying your overall investment portfolio, real estate debt lets you diversify within the asset class. You can do this by choosing  to funds loans secured by a different:

  • Property type (residential, commercial, industrial or vacant land)

  • Property location

  • Loan term

  • LVR (loan to value ratio)

  1. Set an investment time horizon that suits you

Real estate debt investments offer you the security of a real estate asset without tying up your money indefinitely in buying bricks & mortar. And because you can choose between individual deals or managed funds, you can set an investment time horizon that suits you.

How to access investment opportunities in this space

If you’re a wholesale investor looking for a consistent, attractive yield backed by 1st mortgages over real estate, AltX’s platform provides access to a range of real estate debt investment opportunities. To learn more about real estate debt and how to unlock alternative investment opportunities with AltX, visit here.

Private real estate debt has become one of the fastest-growing alternative asset classes in Australia in recent times, as investors hunt for yield in a low-rate environment. Why are these investments getting so much attention? 

How does it work?

When you borrow to buy a house, the bank usually lends you money in exchange for regular interest payments and a mortgage over your property. The non-bank 1st mortgage market (also known as private real estate debt) operates in much the same way. Private investors (you) act as ‘the bank’, providing loans to borrowers in exchange for a registered 1st mortgage over their property and an undertaking to make regular interest payments.

These types of investments are generally short-term in nature, anywhere from 3 – 36 months, so they’re not designed to deliver capital growth. What they do have the potential to provide is a regular, fixed income stream that is often higher than other fixed-income investments, such as bonds or term deposits.

Five reasons to get behind property-backed debt

  1. Your investment is secured by ‘bricks and mortar’

Each loan is secured by a registered 1st mortgage over a real estate asset. This means if the borrower defaults for whatever reason, the secured property can be sold to recover your investment.

  1. Borrowers pay a regular fixed income

Because you are the lender, borrowers contract to pay a fixed interest rate – typically between 4 – 7 % per annum, depending on the transaction.  Under the arrangement, income is paid monthly and is fixed for the duration of the investment.

"My monthly returns are really good…my overall interest rate is about 7%, which in today’s terms is outstanding. I find that every month, the distributions are made exactly as they say they will."  Current AltX Investor

  1. Returns are impacted by a more limited number of factors than other asset classes

The performance of private real estate debt investments isn’t linked to the performance of other traditional asset classes, such as equities. It is based on a specific borrower, their loan arrangement and their security. This protects your investment from the ups and downs of market volatility, potentially delivering a more stable return.

  1. Diversify your portfolio

As well as diversifying your overall investment portfolio, real estate debt lets you diversify within the asset class. You can do this by choosing  to funds loans secured by a different:

  • Property type (residential, commercial, industrial or vacant land)

  • Property location

  • Loan term

  • LVR (loan to value ratio)

  1. Set an investment time horizon that suits you

Real estate debt investments offer you the security of a real estate asset without tying up your money indefinitely in buying bricks & mortar. And because you can choose between individual deals or managed funds, you can set an investment time horizon that suits you.

How to access investment opportunities in this space

If you’re a wholesale investor looking for a consistent, attractive yield backed by 1st mortgages over real estate, AltX’s platform provides access to a range of real estate debt investment opportunities. To learn more about real estate debt and how to unlock alternative investment opportunities with AltX, visit here.

Private real estate debt has become one of the fastest-growing alternative asset classes in Australia in recent times, as investors hunt for yield in a low-rate environment. Why are these investments getting so much attention? 

How does it work?

When you borrow to buy a house, the bank usually lends you money in exchange for regular interest payments and a mortgage over your property. The non-bank 1st mortgage market (also known as private real estate debt) operates in much the same way. Private investors (you) act as ‘the bank’, providing loans to borrowers in exchange for a registered 1st mortgage over their property and an undertaking to make regular interest payments.

These types of investments are generally short-term in nature, anywhere from 3 – 36 months, so they’re not designed to deliver capital growth. What they do have the potential to provide is a regular, fixed income stream that is often higher than other fixed-income investments, such as bonds or term deposits.

Five reasons to get behind property-backed debt

  1. Your investment is secured by ‘bricks and mortar’

Each loan is secured by a registered 1st mortgage over a real estate asset. This means if the borrower defaults for whatever reason, the secured property can be sold to recover your investment.

  1. Borrowers pay a regular fixed income

Because you are the lender, borrowers contract to pay a fixed interest rate – typically between 4 – 7 % per annum, depending on the transaction.  Under the arrangement, income is paid monthly and is fixed for the duration of the investment.

"My monthly returns are really good…my overall interest rate is about 7%, which in today’s terms is outstanding. I find that every month, the distributions are made exactly as they say they will."  Current AltX Investor

  1. Returns are impacted by a more limited number of factors than other asset classes

The performance of private real estate debt investments isn’t linked to the performance of other traditional asset classes, such as equities. It is based on a specific borrower, their loan arrangement and their security. This protects your investment from the ups and downs of market volatility, potentially delivering a more stable return.

  1. Diversify your portfolio

As well as diversifying your overall investment portfolio, real estate debt lets you diversify within the asset class. You can do this by choosing  to funds loans secured by a different:

  • Property type (residential, commercial, industrial or vacant land)

  • Property location

  • Loan term

  • LVR (loan to value ratio)

  1. Set an investment time horizon that suits you

Real estate debt investments offer you the security of a real estate asset without tying up your money indefinitely in buying bricks & mortar. And because you can choose between individual deals or managed funds, you can set an investment time horizon that suits you.

How to access investment opportunities in this space

If you’re a wholesale investor looking for a consistent, attractive yield backed by 1st mortgages over real estate, AltX’s platform provides access to a range of real estate debt investment opportunities. To learn more about real estate debt and how to unlock alternative investment opportunities with AltX, visit here.

Private real estate debt has become one of the fastest-growing alternative asset classes in Australia in recent times, as investors hunt for yield in a low-rate environment. Why are these investments getting so much attention? 

How does it work?

When you borrow to buy a house, the bank usually lends you money in exchange for regular interest payments and a mortgage over your property. The non-bank 1st mortgage market (also known as private real estate debt) operates in much the same way. Private investors (you) act as ‘the bank’, providing loans to borrowers in exchange for a registered 1st mortgage over their property and an undertaking to make regular interest payments.

These types of investments are generally short-term in nature, anywhere from 3 – 36 months, so they’re not designed to deliver capital growth. What they do have the potential to provide is a regular, fixed income stream that is often higher than other fixed-income investments, such as bonds or term deposits.

Five reasons to get behind property-backed debt

  1. Your investment is secured by ‘bricks and mortar’

Each loan is secured by a registered 1st mortgage over a real estate asset. This means if the borrower defaults for whatever reason, the secured property can be sold to recover your investment.

  1. Borrowers pay a regular fixed income

Because you are the lender, borrowers contract to pay a fixed interest rate – typically between 4 – 7 % per annum, depending on the transaction.  Under the arrangement, income is paid monthly and is fixed for the duration of the investment.

"My monthly returns are really good…my overall interest rate is about 7%, which in today’s terms is outstanding. I find that every month, the distributions are made exactly as they say they will."  Current AltX Investor

  1. Returns are impacted by a more limited number of factors than other asset classes

The performance of private real estate debt investments isn’t linked to the performance of other traditional asset classes, such as equities. It is based on a specific borrower, their loan arrangement and their security. This protects your investment from the ups and downs of market volatility, potentially delivering a more stable return.

  1. Diversify your portfolio

As well as diversifying your overall investment portfolio, real estate debt lets you diversify within the asset class. You can do this by choosing  to funds loans secured by a different:

  • Property type (residential, commercial, industrial or vacant land)

  • Property location

  • Loan term

  • LVR (loan to value ratio)

  1. Set an investment time horizon that suits you

Real estate debt investments offer you the security of a real estate asset without tying up your money indefinitely in buying bricks & mortar. And because you can choose between individual deals or managed funds, you can set an investment time horizon that suits you.

How to access investment opportunities in this space

If you’re a wholesale investor looking for a consistent, attractive yield backed by 1st mortgages over real estate, AltX’s platform provides access to a range of real estate debt investment opportunities. To learn more about real estate debt and how to unlock alternative investment opportunities with AltX, visit here.

Get in Touch

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