Investors looking to get on the property ladder or diversify their portfolio can now buy part of a house or property for under $100, following the launch of a new platform that allows investors to buy a share of a residential property.
The BRICKX platform allows Australian residents (those classed as residents for tax purposes) to purchase part of a property that has been acquired by the company’s funds.
Each property is put into a trust, which is then split into 10,000 units, or ‘Bricks’. Once the property is rented out, registered users are able to buy and sell Bricks on the BRICKX Platform (limited to 5 per cent of any one individual property), with each Brick initially sold for its respective proportion of the purchase cost.
According to BRICKX, the properties are all valued every six months to allow users to monitor their portfolio performance and provide guidance around pricing, should they wish to divest.
The company then charges a fee of 1.75 per cent of the transaction value.
Currently, the platform owns five properties:
- a unit in Mosman, NSW;
- a unit in Enmore, NSW;
- a house in Annandale, NSW;
- a unit in Double Bay, NSW; and
- a house in Prahran, Victoria.
The cheapest brick on offer at the moment is $67 for a share of a unit in Enmore, NSW.
According to BRICKX, this type of property investment is attractive because it allows new investors to get onto the market, gives existing investors the opportunity to diversify, and provides fast divestment as “the average selling time [for Bricks priced around market value] is one or two days”.
BRICKX CEO Anthony Millet said: “The reality is, many Australians are put off investing in residential property. It’s generally accepted that acquiring a property is expensive, time-consuming and daunting for those without specialist knowledge.
“With BRICKX, Australians have access to all the potential benefits of investment property ownership — capital returns and rental income in proportion to the number of Bricks they hold — without needing to purchase an entire property.”
Mr Millet added: “There’s a deep sense of frustration, particularly among younger generations that they, or someone they know, will be locked out of the property market forever. This form of property investment is accessible on so many levels — investment is easy, distributions are typically regular, divesting can be as simple as listing your Bricks for sale.”