A fractional property investment platform, which offers investors the opportunity to fractionally invest in any property they would like, has gone live.
The platform, CoVESTA, differs from other fractional investment platforms in that instead of selecting from a curated list, investors are able to fractionally invest from 1 per cent of the price of any property of their choosing, along with fees and taxes, from cash savings or from superannuation held in an SMSF.
Additionally, investors who invest and rent a property with a minimum of five per cent of a property can become a co-owner and a tenant of the property for up to five years.
Daniel Noble, CoVESTA CEO and founder, said that the service is an attractive option for those who have a mortgage already but would like to invest in another property without accruing too much debt.
“This new investment opportunity is timely as house prices are starting to drop in some areas, while rents are increasing, so now is a good time to opt for our Invest & Rent option if you’re still a tenant,” Mr Noble said.
“All they need to do is find an investment property they want to live in, start an Invest & Rent syndicate and once the syndicate is closed, become the tenant.”
In this instance, the investor/tenant pays the market rent to live in the property and then gets back their share of the net rental income; they pay less rent while acquiring an investment property. It gives them the opportunity for capital gains and rental security for a five-year period.
Syndicates can consist of anyone, from friends and family, to investors and property experts, and once a syndicate is full, CoVESTA purchases the property at market rates and manages the property, and if an investor does not decide to rent a property themselves, CoVESTA will locate one and take care of maintenance.
The property, which is held in a trust, will be sold after five years of being purchased unless 75 per cent of the syndicate vote to keep it for five years. If sold, capital gain is divvied up between members of the syndicate.