7 reasons you should build your investment portfolio with syndicated property
Still undecided about whether commercial property investments are right for you? We understand. It’s a big decision. Here are seven reasons why joining with other investors to buy commercial property should be part of your wealth-creation strategy.
Compelling returns, compared with many other investments
- Residential property income returns have fallen in recent years, to an average of somewhere less than 3-4%. In commercial property, returns of 8-12% gross are not uncommon. There are a number of factors that explain this, including scarcity, location and demographics, but also commercial property tends to cost a lot more than residential, and it’s less generic. That means it takes more skill to find the right tenant. These factors all add up to a higher rate of return.
Full management of the acquisition and day-to-day operation of the investment
- Sure, it’d be great to own part of a hotel, or an office building, or a self-storage complex. But who will look after the tenants and leases, the operation of the business, legal governance and reporting, and all the other administration that comes with running a business? Also, the acquisition of suitable properties takes a lot of skill—demographics, yield, location and WALE all need to be considered. On the other hand, when you group together with other investors to buy commercial property, all of this is looked after by professional managers. It’s a completely passive investment so you can prioritise other work commitments, or the important business of retirement.
Enables diversified portfolios, both geographically and by type of real estate.
- If you spend your entire investment budget on the one property, all your investment eggs are in one basket. When you join with our investors to buy commercial property, you could own part of a shopping centre in regional Queensland, an office building in Melbourne and a self-storage complex in Perth. A diversified portfolio means more security and should also mean less risk.