Property trusts can be a great way to diversify your investment portfolio and gain exposure to the property market without having to directly purchase property.
A property trust is a type of investment vehicle under which investors pool their money with other investors to purchase property or property-related assets which are managed by an investment manager. Property trusts can be either listed on a stock exchange (listed property trusts) or unlisted (unlisted property trusts).
Listed property trusts are more liquid and therefore may be a better option for investors who might want to cash in their investment quickly. Unlisted property trusts are not traded on the stock exchange, and while they can be slower to sell, they may also provide an opportunity for growth.
Diversification: By investing in a property trust, you can either spread your risk across multiple properties or through a single property (known as a syndicate).
Shared risk: Because you are not the only investor/owner in a property trust, any investment outcomes will be diluted across multiple investors.
Professional management: Property trusts are usually managed by professional property managers who have the expertise and experience to maximise the return on investment.
Competitive income: Property trusts typically offer competitive income returns, which can provide a steadier stream of passive income.
Capital growth potential: If the property market experiences capital growth, your investment in a property trust is likely to increase in value.
The opportunity to own property: By investing in a property trust, you can own property without having to deal with the day-to-day hassle of being a landlord.
Tax benefits: you may benefit from the receipt of tax-free,tax-deferred income or the receipt of franking credits as a distribution of your units held in a property trust.
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