It’s not you in fact, it’s been around for a long time, but this company has very successfully applied it to 21st-century real estate. We know at as fractional investment, but it could be just as easily called crowdfunding. DomaCom has harnessed the power of the crowd to create what could be Australia’s most effective property investment model.
Fractional property investing has really been around for a long time. It’s just a modern form of [property] syndication and another word for it is crowdfunding because all it is is a pool of people get together and invest and purchase a property. Exactly like they would in the old days with syndication the difference though is that now anyone can do it, not just those people in the know. Crowdfunding comprises really two stages a technology layer that enables people to syndicate together to pledge towards a transaction target and then the second component is the legal structure that underpins that and makes it all work so that retail normal mums and dads, normal investors can invest in the property of their choice.
The DomaCom found is a unique fractional ownership model that’s been developed to benefit all Australians.
DomaCom model is an Australian innovation there’s nothing like it in the world but the catalyst behind the Domacom model and the idea really comes from experience in looking at 18,000 self-managed super funds and 90% of them had zero property, 10% had all property so why did 90% have no property? Well, simply because the transaction was too big for those portfolios so that’s where the idea came from to solve that fundamental problem to allow the property to be treated just like equities.
But how is this different to other forms of property investing and how does it Work?
Investors get what they want and that’s the thing that we really tried to deliver is that with a hundred people in a room there are a hundred different views, you know one-bedroom, two-bedroom, north facing, south facing and what we allow investors to do is to invest in the properties that they wish to with the money that they have, we collect the rent and we deliver it up to all investors in proportion to their ownership we appoint.
Professional property managers very much like if they invested themselves in one property, except that haven’t had to put all their eggs in one basket you know which is what’s called concentration risk. DomaCom adds a due diligence layer as the book bill starts to fill up to 30% we engage with conveyancing lawyer to check the title and contract of sale, 50% we do building inspections, pest inspections, valuations and so these go into make sure that the property is in good condition and the price that we’re targeting is fair and reasonable.
As we know a secured property investment is not complete without a sound exit strategy.
As for any investment, investors always want to know how they can exit their investment and when they invest through the DomaCom platform they told the three main ways they can exit their investment, but the most popular way is using our online liquidity facility. We’re unique in Australia we’ve obtained what’s called marker makeup permissions as part of our financial services license and that enables us to create liquidity by allowing investors to buy and sell their units on an online transaction very much like there would shares, so that’s really how you’d get out anytime you like offering your units for sale at a price that you think the other investors will buy.
To find out more about fractional property investment have a chat with your financial advisor or speak to DomaCom direct.