Property Investments: An Excellent Way to Secure Your Money

Access to property investments is well-established, with a range of direct investment opportunities and collective investments available for both retail and institutional Investors alike. In the first instance we should look into the range of property sub-sectors available for consideration, and further investigate both direct and collective access points for the sector in general.

The main property sub-sectors that may be available for smaller investors are:

• Residential
• Commercial
• Student Accommodation
• Care Homes
• Hotels
• Leisure / Tourism
• Development
• Agricultural
• Forestry

Within each sub-sector lies a range of possible entry points for Investors; broadly categorised as either direct investments or collective investments. Collective investments being either regulated or unregulated fund arrangements, where Investors capital is pooled so as to acquire a basket of assets, or participate in a project with a large capital requirement.

Direct investments on the other hand, are simply straightforward acquisitions of property assets by the Investor. There are, for example, funds for residential, student accommodation, commercial and most other sub-sectors, and likewise, there are options for Investors to directly acquire investment properties in each of these sectors via freehold or leasehold title.

Direct investments: Simply the acquisition of property assets by the Investor, many forms are taken by direct property investments; from the acquisition of property for improvement and sale; through acquisitions for leasing/rental to a tenant or operator. For the Investors with sufficient capital or finance, direct investments remove the majority of risks specific to collective investment schemes where Investors are reliant on the external management of a property portfolio. Direct investments do however carry asset-specific risks; property assets can incur significant financial liabilities, including on-going maintenance, tax and round trip purchasing costs (the cost of buying and selling an asset).

For the direct Investor, careful consideration should be given to the due diligence process during the asset identification and acquisition stage, as in most regions this will require specific professional input from legal practitioners, surveyors, valuation agents, and in the case of niche property investment projects with a specific strategy Investors must also consider the counterparty risk in that in many cases Investors might be reliant on the performance of a strategy manager to achieve the expected returns from investing in their strategy.

Collective investments: Property funds come in all shapes and sizes, and invariably involve a Fund Manager acquiring a basket of properties in line with the fund's investment strategy, and managing those assets on behalf of Investors in the fund. There are funds, both regulated and unregulated, that invest in all of the major property sub-sectors. One can find opportunities to invest in residential real estate, student accommodation, care homes, commercial real estate, shopping centres and property developments. Some of these funds cater only to large Institutional Investors, whereas other offer lower entry levels for smaller Investors.

Whether listed or unlisted, regulated or otherwise, collective investments in property assets offers access to the asset class for the smaller Investors, although in many cases the cash flow dynamics of securitised investments differ greatly from direct investments in property assets.

Chris Giufre can help you as he has vast experience in all aspects of property investment, construction, property acquisition and project management.

http://chrisgiufreupdates.com.au/

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