A growing demand for Australia’s agri-products means investing in agricultural properties can provide offer investors yield and capital growth in an expanding industry.
Achieving a ‘model’ portfolio in property is difficult if not impossible because of the singular high cost of each property. If you recommend an asset allocation to property of, say 20 per cent it is certainly impossible to acquire multiple properties unless the value of the underlying portfolio is in the millions, or a very large debt is created.
As with other professional disciplines like accounting, legal, risk, finance and broking, property is a specialist field, but not a daunting one. In the same way you engage a solicitor on estate planning matters or a stockbroker to create an equities portfolio for a client you can engage a buyers agent to help in the property selection process. Good agents are qualified, carry PI insurance, are members of a reputable organisation and most of all don’t sell property – they buy it. So you need someone who is research based and able to demonstrate a sound methodology.
Finding a good property to invest in requires solid quality research. Whilst fear and greed can influence share price movements, unfortunately, it is predominately the emotional connection that people have with property which frequently sways their investment decisions.
Asset allocation is an investment strategy designed to balance risk and reward by diversifying across the major asset classes – property, equities and cash/fixed interest – each of which performs differently over time, known as cycles. When one asset class is up, another may be down.
The fractional property investing model gives you the tools to offer your clients all the benefits of a prudent investment strategy within the property asset class with a reasonable acquisition cost and ongoing holding costs.
Fractional property investing (FPI) is a method of acquiring an interest in real property of the investor’s choice without having to purchase the whole property.
DomaCom General Manager Sales & Marketing, Warren Gibson discusses why fractional property investing is the ultimate fee-for-service vehicle.
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