If you want to invest in real estate but have limited funds, fractional and fragmented property investment is a good place to becoming an investor.
What is Fragmented Property Investment?
There are various types of property investment, two of which involve co-ownership of properties. These are: fractional and fragmented properties. Investing in fragmented property simply entails purchasing a portion of a property that is co-owned with others. You could own a property with other people without spending money on an entire house. You can enjoy the benefits of property ownership without having to spend thousands of dollars.
The difference is, in fractional property investment, your name is not on the deed of the property, whereas in fragmented ownership, the investors receive the title to the property and are true owners. When considering fragmented ownership, there are several platforms to consider, Bricklet is one of them, and is also the most popular for fragmented ownership.
What is Bricklet?
Bricklet is a platform that allows you to purchase a portion of a property rather than the entire property and reap all of the benefits of owning that property. Isn't that incredible? It only gets better from here. When you invest with Bricklet, your name will appear on the property deed, and you will have permanent ownership of the property alongside the co-owners. When you buy a portion of a property on the platform, that portion is referred to as a "Bricklet".
How does Bricklet work?
When you decide to purchase a Bricklet, you go to the platform and sign up for an account. Bricklet owners can buy, own, and sell their bricklets on the open market or through Bricklet's dedicated listings market for fragmented properties at any time.
When you purchase a bricklet, you select a conveyancer. A fragmented property is one in which each bricklet represents only a pro-rata portion of the total value of the property. Gains on each bricklet are pro-rata as well, allowing you to own and earn from the property for less than the cost of purchasing the entire property. This also enables investors to profit from a diverse bricklet portfolio rather than just one property.
Independent property management companies that have been approved and integrated into the Bricklet platform provide property management. The ability to own bricklets across multiple properties allows the investor a portfolio approach gaining access to a mix of short, medium-, and long-term gains.
Bricklet property deeds are just as secure as Torrens Title property deeds. This is because the ownership of each bricklet is recorded on Torrens Title until it is sold to a new owner.
How Bricklet brings the ability to “Buy Now Pay Later” in the Australian real estate market.
I believe we can all agree that the ability to buy something we want and pay for it later is appealing. It saves you the time it would take to save money and also allows you to have what you want when you want it. This is most likely one of the reasons Bricklet decided to offer this property investment option to everyone. Incredibly, you can buy a Bricklet and pay for it later. You can invest even before you have the full sum. Bricklet is not only cost-effective, but is also convenient. Bricklet unlike many other Buy Now Pay Later platforms, has no late payment penalties. If you find yourself unable to continue making payments, you can simply sell your Bricklet. The buyer would pay the first payment of 10% of the value of the Bricklet (plus any applicable costs such as stamp duty and conveyancing) and then pay off the remainder of the amount owed over 18 months in 5% instalments (news.com.au).
Is buying a small portion of property worth it?
After considering the fees, returns, property type, liquidity, and flexibility, you will be able to determine whether it is worthwhile. If there is a simple way to get into the property investment business, it is through fragmented ownership. Even if you do not intend to stay for the long term, it is a good place to start and well worth your money and time. You enjoy the benefits of property ownership without the hassles. Don't you think it's worth giving it a shot? (savings.com.au)
How do you sell your Bricklet?
Simply log in to your Bricklet account, select the bricklet you want to sell, and place it on the platform for sale. This makes the selected bricklet visible to all existing Bricklet account holders and available for purchase. You can also hire an agent to help you with the market evaluation and sale of the bricklet.
What are the costs of selling your Bricklet?
When selling your Bricklet you are charged 1% of the selling price. This covers the conveyancing costs associated with the transfer of ownership on the land title.
Usually, the issue starting is money. Savings a large amount of money required to enter the world of property investment is not an easy task. As a result, platforms like Bricklet have their place for beginner’s. But would you rather own fraction of a property or the whole thing starting with just $15,000 in savings?