Is bricks and mortar the only way to add real estate to your portfolio?
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, there may be a few drawbacks.
- High transaction costs: Buying and selling real estate can be costly when you add up all the duties, legal costs and agency fees. To make this money back, you need to hold onto your investment long enough to generate sufficient capital growth and/or rental income.
- 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, with high entry and exit costs. This can make it hard to add diversity to an investment portfolio as the size of the investment can often dominate your overall holdings.
- 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 and expertise 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 a way to protect your money from market fluctuations, and gives you access to interest payments from the private/non-bank 1st mortgage secured loan.
The asset class typically pays a return of between 4-8% p.a. paid monthly
While there is no return without risk, according to AltX Co-Founder, Nick Raphaely, if you’re working with a provider who understands what they’re doing—who has the experience, the track record and the expertise to get on top of those risks—you can enjoy a steady and reliable rate of return with low risk to your principal.
Is private real estate debt right for you?
If you’re a wholesale investor looking for a consistent, attractive yield backed by 1st mortgages over real estate to grow your wealth, AltX’s platform lets you access quality, curated and vetted private real estate debt investment opportunities. To learn more about real estate debt and how to unlock alternative investment opportunities with AltX, visit www.altx.com.au/investments
Level 21, 10 Grafton Street
Bondi Junction, NSW, 2022
Phone: 1300 991 380
By digitally dividing assets into smaller investable units, you can access institutional-quality opportunities with cheque-sized investments. As published on Money Management
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At AltX, our extensive due diligence on all deals ensures we only offer quality investment opportunities to investors.
With the withdrawal of traditional lenders post the GFC, coupled with tighter lending standards for banks, non-bank mortgage providers emerged and have been growing in popularity.
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