The Australian property market has crossed the $9 trillion mark in 2022, adding $512.6 billion in just three months. Hence, investing in the Australian real estate market is a no-brainer for anyone wishing to get consistent returns.
With investors giving more and more importance to diversification to create a more balanced portfolio and minimise investment risks, investing in property funds is gaining importance. When looking for a diversified investment portfolio, investing in the Australian wholesale property fund is probably one of the best decisions you can make.
No matter your income position or where you live, investing in real estate can be a safe means for wealth creation. The following are the reasons why you should invest in property funds.
Access to investment opportunities
The Australian property market has an average growth of 11 percent each year. It means that the Australian economy is resilient, ensuring your investment is safe.
The real estate market of Australia depicts strong investment opportunities in commercial properties and large-scale developments. However, these investments are capital-intensive and may not be feasible for individual investors to finance alone.
A high-quality commercial property in Australia costs over $3 million, while a boutique apartment can range between $2 million and $15 million. However, investing in property funds creates opportunities for investors to gain exposure to these properties at a fraction of the cost of direct investment.
Opportunities for diversification
Investing in the Australian wholesale property fund also offers investors the benefits of diversifying their property portfolio. The capital outlay is low for such investments, usually $50,000 and above. Therefore, the investors have the opportunity to make multiple investments across different locations. It could be a combination of commercial and residential or direct and property funds. In several cases, property funds can also be diversified and comprise various types of properties in multiple locations.
When you distribute capital across various asset types and areas, you can maximise the benefits of growth cycles in different property markets. You can also take advantage of individual movements of all the industries in different markets.
Diversification helps investors create a balanced portfolio, including a mix of high-growth properties and income-generating assets. Therefore, you can benefit from long-term capital growth and ongoing cash flow.
Reduced risks
When you distribute funds across different investments, you create a more balanced portfolio. Moreover, diversification is crucial in reducing the buyers’ exposure to market fluctuations and risks. While investing in different asset types and locations enables investors to maximise upturns in different markets, it also minimises the risks of a stagnant property portfolio when the markets experience a downturn. This way, you can mitigate risks and ensure better protection of your funds.
Better choices
Every investment decision leads to whether you have made the correct choice. While property investment is rewarding, it can be a complex investment market.
Investing in large-scale projects requires sophisticated market knowledge and an assessment of different market trends. And navigating all of these can take up a lot of your time.
But when investing through property funds, the projects are managed by an experienced team who looks into the strategic formulation and day-to-day asset management on your behalf. As you engage a company with a strong track record, the managers can be invaluable in developing strategies to maximise the project value and minimise investment risks.
Investing in property funds can open up a plethora of opportunities for you. However, you won’t get the expected results if you lack adequate knowledge. So, before investing, it is best to consult your financial advisor and determine which type of investment aligns with your risk profile and goals.
