What you'll learn in this step: Trusts and syndicates provide exposure to a broader range of property

What you'll learn in this step: Trusts and syndicates provide exposure to a broader range of property.

Pooling your funds with other investors in vehicles such as property trusts and property syndicates provides exposure to a broader range of property – including commercial, industrial and retail as well as residential – often with a smaller investment required.

You’ll be spreading your risk rather than being hostage to the ups and downs of the residential property cycle and you’ll still have access to tax advantages such as depreciation – but you won’t have to worry about kitchen colours and clumsy tenants.

Property trusts

Property trusts aim to generate rental income from a portfolio of professionally selected properties with good tenants on long leases, along with some capital growth in the value of those properties.

Property trusts can specialise in particular sectors – such as retail or industrial property – or they can be ‘diversified’, investing in various types of property.

They can be listed or unlisted. The advantage of investing in a trust listed on the stock exchange is that you should be able to sell part or all of your holding quickly – something that’s not so easy with your own bricks and mortar. But, like any investment, nothing is guaranteed.

Listed property trusts (LPTs) have blossomed in recent years and now account for something like 10 per cent of the Australian sharemarket’s value. A recent development is a push by LPTs into property assets overseas.

Read more about: