DomaCom Newsletter – June 2015
Anniversary of 1st bookbuilds
We’re excited to say we are approaching the anniversary of our first property bookbuilds in mid-August. These were commenced in July 2014 under the auspices of financial planning firm Shartru Wealth Management. Shartru has since introduced more than 40 clients to DomaCom’s innovative fractional property investing platform, purchasing several residential property investments through the Fund.
Reduction of minimum investment amount an advantage
We have updated the DomaCom Fund PDS to reflect a drop in the minimum initial investment from $20,000 to $2,500 to make it easier for more people to invest in a property.
DomaCom’s investment process requires a 14 day cooling off period between making a cash deposit and committing to a property bookbuild. During this time interest is paid based on the ANZ cash rate + .60%. Currently, the rate is 2.6%. With this change to the PDS a deposit into the cash pool only requires $2,500. The advantage to investors is they can secure an option to join a bookbuild without stumping up a large amount. Any further contributions to the cash pool do not require a 14 cooling off period, which means they can tip in more money as soon as a property is identified. For further details on cooling off period, please see our latest updated PDS on our website.
DomaCom Tax Statement is coming soon
The preparations for the end of financial year is underway at DomaCom. We are currently checking all the components involved and should be in a position to issue Tax Statements for each sub-fund by end of August 2015.
In the meantime, if you have any questions about our Tax Statement, please contact firstname.lastname@example.org.
Alternative property types for fractional investment
Since launching DomaCom, a number of alternative property types have been listed on the platform for bookbuilds. Among them are strata car parks, rural property, student accommodation, new developments, existing houses and small to medium commercial/retail properties including an office complex, a hotel and a KFC store.
The significance of these listings is that they offer varying levels of yield, capital growth or a balance of both, but the preference of the investors for one property type over another must also be considered.
One of the most interesting bookbuilds is a Southern Mallee Victorian property of 1,281 Ha, a $2m property with a long-term lease. This property offers a 5.1% yield. Farmland in the Mallee shows a historic growth of 7.2% p.a over 20 years (1990-2010).
Gen Ys – a generation that knows what they want and how to get it!
It’s pretty well known that Australians love bricks and mortar. It’s the “great Australian dream”. With record low-interest rates, property investment is an increasingly attractive option for building wealth.
But is it held in the same regard for Gen Ys?
The millennials are often referred to as precocious, demanding and rude, the ‘entitled generation’. But that may just be a by-product of the previous generations need to feel superior. The war generation had an opinion of the baby boomers who had an opinion of the Gen Xers. It’s a generational thing.
One certainty in relation to property is that for many, the price of property it seems has roared well ahead of their ability to get their foot on the ladder, and that is a concern.
However, what a recent survey has revealed may floor us. Literally!
According to the Domain Consumer Insights Study, 16% of Gen Ys own two or more properties, compared to 17% of Baby Boomers and Gen Xs. The study shows that younger generations are entering the market at an earlier age. The average age that Gen Y Australians became investment property owners is 25 years, whereas the average age for Gen X was 35 years and 45 years for the Baby Boomers.
So for the financial advice industry, there is opportunity aplenty if they embrace the property asset class, specifically residential property, to help the clients of tomorrow who are showing early signs of strong interest in this sector. It seems they prefer property rather than the equities market which is seen by many as risky.
It is worth noting that Gen Ys are by far the most tech-savvy, which gives them the ability to access information, and they like participating online.
With many Gen Ys living at home with their parents for longer, delaying marriage and children until later, they are able to complete their higher education and seek life experiences such as travelling a lot earlier. Naturally, living at home with parents has the significant benefit of allowing them to have sizable savings.
Despite government incentives to enter into home ownership, plenty of wised-up Gen Ys are buying investment properties as their first purchase. And it makes so much sense!
From a cash flow and lifestyle point of view, it does seem like a win-win situation. They have:
- A home – they can continue living with their parents where they have the freedom to come and go (plus less cleaning, less cooking, fewer expenses); and
- An investment property – where they get the tax benefits, and a purchase which requires less commitment than a home.
We shouldn’t underestimate Gen Ys. They know what they want and are quick to work out how to get it.
If Gen Y is the next generation of financial planning clients and property is what they want then help them achieve it in the best possible way. Be flexible enough to engage this demographic at their level and in the way they want, or get out of their way seems to be the message coming through.
We have added a property advice page to our marketing site www.domacom.com.au to help you find a suitable buyer’s advocate or agent to take a brief from you to source suitable investment properties for your clients.
You’ll find some information about PIPA and PIAA, two industry bodies who represent professional buyers’ agents who will help you produce a property SOA for your client’s property investment.
Below each association, you will find a list of members who are happy to assist you and your clients in this process.
The key things to look for in selecting a property adviser are: they do not sell stock, they are fee for service based, they are holding a QPIA or APA qualification from their respective membership and they also hold PI insurance.
KnowledgeMaster special offer for DomaCom Accredited Advisers
As an additional benefit for DomaCom Accredited Advisers, we are offering a complimentary e-book titled “A Practical Guide on How to Build a Referral Based Business” from Jim Prigg of KnowledgeMaster.
KnowledgeMaster offers a wide range of practice management manuals, so if you’re a DomaCom Accredited Adviser you can access these at a substantial 50% discount. Click on the following link to access this offer: http://www.knowledgemaster.com.au/domacom/.
DomaCom supports Positivity for Planners
Positivity for Planners is a campaign to re-educate the public about what financial planners do, with a focus on the positive side. The campaign will spread genuine good-news-stories of financial advice using professionally produced materials such as videos, cartoons, podcasts and articles.
Your help and pledge to donate is needed to fund this campaign. Organisers need to raise $100,000 in crowdfunding donations to pay creative artists and buy ‘air time’ to give the campaign real impact. If this target is not reached, you won’t pay a cent.
DomaCom is a proud supporter of Positivity for Planners. Join us in supporting this good cause that will paint your industry in a more positive light. Visit www.positivityforplanners.com.au for campaign details, who’s behind it and how to donate.
In the media
- DomaCom added to another APL
- Property – aspiration to fulfilment
- DomaCom Ltd Pre-IPO Investor Roadshow Dates Announced
- Aussie investment firm, DomaCom, establishes Ag arm
- Encouraging ag investment
- What is Fractional Property Investment (FPI)?
- DomaCom adds to property crowd-funding mix
- Govt under fire over SIV suspension
DISCLAIMER: DomaCom Australia Ltd ACN 153 951 770 is the holder of an Australian Financial Services Licence (AFSL) 444365 and is authorised to provide general financial product advice, to deal in certain financial products and to make a market in units in sub funds of the DomaCom Fund ARSN 167 020 626. Whilst DomaCom has taken all reasonable care to produce the information in this material, it does not make any representations in respect of, or warrant the accuracy, timeliness or completeness of any of the information. The information provided in this material is general information only. It does not constitute financial, tax or legal advice or a forecast. This information has been prepared without taking into account your personal objectives, financial situation or personal needs. Before acting on the information or deciding whether to acquire or hold a financial product, you should consider its appropriateness. It is recommended before making any investment decision, that you seek independent financial advice and read the relevant Product Disclosure Statement (PDS) and any Supplementary Product Disclosure Statement (SPDS) available on the DomaCom Ltd website, www.domacom.com.au , or by phoning 1300 365 930.