Property Partners

Property Partners started as a thought, not like an invention with a flash of brilliance, but a gradual realisation that a collection of ideas and experiences could be combined to provide the answer to my problems in creating a property portfolio.

A transient life of working in the construction industry in remote locations and overseas travel, combined with the normal reluctance to getting into debt meant that I had got to my mid 30s with my partner, 2 children, a good income but only 1 investment property!

Due to the cyclic nature of the construction industry I was looking into tenants-in-common or similar arrangement to enable investment without substantial debt.

Investigation showed that a company structure would best suit our purpose. High costs to establish and run a normal unit trust led us to the 20/12/2 rule and unit trusts, where investors could be shown by a Offer Information Statement the outlines of the investment rather than a more expensive Prospectus required by a normal company fund raising exercise.

The 20/12/2 rule enables an entity to offer an investment to up to 20 investors over a  12 month period with a value of less than $2 million, this fitted our criteria exactly. We could put investment packages together with  a value of between $200,000 and $2,000,000 and thus be able to offer investors the ability to choose property investments in a variety of price brackets ($10,000 to $200,000), areas and genre that suits their financial means.

We also operate our own Self Managed Super Fund and because of ASIC rules found ourselves restricted to investing in shares and managed funds. Again the Property Partner Investments structure would allow us to invest our Super Funds in property.

Traditional propery unit trusts are faceless, you know your funds are invested but you don't indentify with particular properties. Property Partner Investments allow you to choose the actual property. You can drive  down  the street and  look at what you have invested in. It also enables you to spread your investment from suburb, town or genre!

Under ASIC rules trustees can charge 5% of the capital costs and 6% of returns to manage each trust. Property Partner Investments charge 3% of the capital cost and 1% of returns. Property Partner Investments will attempt to negotiate prices to enable our charges to fall within the normal cost of the investment, ie. the proportional net cost and return would be the same as if you invested on your own.

How it works:
Property Partner Investments put together an investment package, this is either a turn-key house and land package, strata  title property (unit etc) or commercial property.
The normal costings incurred with a house land package are:
Home construction cost.
Fencing, floor coverings and landscaping.
Land cost.
Stamp duty.
legals.
Trust costs, Offer Information Statement and ASIC lodgement costs.

Property Partner Investments then  consolidate the costs, purchase price, stamp duty, legals, trust costs etc. and then offer the  property as a unit trust comprising 20 units of equal value. The property is held in trust by Property Partner Investments, the unit holders act individually of each other, you can borrow against the value of your unit, sell it, leave it in your will. The returns and tax deductions are shared on an equal basis by all unit holders and are transferred with the sale etc of each individual unit. Stamp duty and Taxes are applicable as per the sale of any asset.

Property Partner Investments act as Trustees and charge 1% of the returns to pay the accounts of the trust and disperse the income to the unit holders, where possible we will act as  letting agent and that fee will be absorbed in the usual letting fees.

A $500 non-refundable deposit is payable on the purchase of each unit, the remainder is payable when each trust is fully subscribed, these monies will be held in an interest bearing account until drawn upon for progress draws etc for the completion of the purchase of each property, all interest will be paid as per income from the property.

If you have any further questions please contact me through the form below.
Kind regards
Natalie BCom