Property Asset Class

There are various ways to gain exposure in the property market.

The most common example of property investment is the purchase of your own home or investment property. The bricks and mortar approach to investing in property is not without its trade-offs, such as ongoing maintenance, interest costs if financed, agent fees and having to be either all in or out (i.e. you can not sell a room if you need to).

The other is via managed investments that provide diversified approach to the property market by pooling your funds with other investors and providing access to investments that you wouldn’t be able to access individually, such as large-scale commercial warehouses or office buildings. 

Managed investments can provide a greater level of diversification and liquidity and the ability to sell units in the investment in event you need to access funds as opposed to selling an entire property. 

Property is considered a growth asset and as such its returns can fluctuate. As with shares, the returns can be characterised into two components:

Capital growth: the value of the property increasing over time.

Income: the amount of rent you receive from the property.