Australians love investing in property…and with good reason. Property investment can provide a passive income, long-term appreciation and a lower level of risk compared to some other investments. It’s no wonder that over 2 million Australians now own investment properties.
But there’s more to successful property investment than just owning a rental property. Savvy investors need to be constantly on the lookout for innovative ways to diversify their portfolios. One option that has been gaining traction recently is fractional property investment.
But what is fractional investing, and how can it help you diversify your investment portfolio?
What is Fractional Investing?
Fractional property investment in Australia enables individual buyers to invest in fractions (or shares) of high-value properties, rather than having to take on the complete financial burden themselves.
For example, rather than trying to purchase a $2 million property outright, an investor may choose to buy a fractional share. They’ll still receive a percentage of any passive income generated by the property, as well as any appreciation in property value. But they won’t be solely responsible for a $2 million investment. Not only will this allow investors to spread out the risks associated with property investment, but it also makes investment opportunities more affordable.
How Can You Diversify Your Portfolio with Fractional Property Investment?
Diversification is a fundamental principle of investment strategy. It helps to reduce risk by allocating investments across different assets. In other words, it discourages investors from “putting all their eggs in one basket.”
Fractional property investing offers a unique opportunity to vary a portfolio by providing access to a broader range of properties and markets (opportunities that otherwise might be inaccessible due to limited finances). For example, rather than buying a $1 million house in an inner-city location, a buyer may choose to fractionally invest in an apartment block in Melbourne, a waterfront mansion in Sydney and a high-value commercial property in Brisbane.
By investing in fractions of multiple properties across various locations, investors can spread their risk and reduce their exposure to market volatility.
What Are the Benefits of Fractional Property Investment Australia?
There are numerous advantages to fractional property investing, including:
- Access to High-Value Assets: Fractional ownership can give you access to premium properties that may have otherwise been unaffordable. By pooling resources with other investors, you can participate in the ownership of lucrative real estate assets with lower capital requirements.
- Increased Diversification: Fractional investment is an ideal way to diversify your portfolio across multiple properties and markets. This reduces overexposure to a single asset while also increasing your investment portfolio’s resilience against market fluctuations.
- Professional Management: Fractional investment platforms may also offer a range of professional services that make it easier to manage an investment property. This could include ongoing maintenance, financial reporting, and dealing with tenants on your behalf.
- Potential for Higher Returns: By diversifying across multiple properties and markets, fractional investment has the potential to deliver solid returns from a variety of properties. This could provide you with a consistent stream of passive income, as well as higher capital appreciation over time.
How to Get Started with Fractional Property Investing
Fractional investment offers an innovative approach to diversifying your investment portfolio. It’s also now easier than ever, thanks to professional property investment companies that can facilitate the process for you. Rather than having to find a suitable property and a group of like-minded investors, anyone interested in fractional property investing can now approach a professional investment company directly.
Ask Positive Income Properties About Fraction Property Investment
If you’re looking for proven strategies to help diversify your investments, why not consider partnering with Positive Income Properties? Our team of seasoned professionals is dedicated to helping investors successfully diversify their portfolios through a range of opportunities, including fractional property investment.
To get started, contact the team at Positive Income Properties today and unlock your potential for long-term financial success.
Gil Elliott is the Managing Director and Founder of Positive Income Properties. Gil has a rich background in business consulting and property investment. All of these he gained in his nearly four decades of experience in the real estate and marketing industries.
