There is an increasing range of options available when it comes to investing in property.

For many people, the first property they may own is the family home. This may be followed by the purchase of a second residential property or a commercial property such as an office, a shop or a warehouse, bringing with it the potential for a rental income stream and capital growth. Many business owners find it attractive to purchase the building in which they conduct or intend to conduct their business.

Buying shares in property companies

However, for some investors, the entry costs in terms of buying properties can be prohibitive. If this is the case, it is well worth considering buying shares in Australian companies (such as Westfield) that invest in property.

Such an approach offers the potential for an income stream via dividends and capital growth on your investment. Shares also offer a greater degree of liquidity compared to investors who buy their own properties.

Australian Real Estate Investment Trusts

Australian Real Estate Investment Trusts (A-REITS) are very much like a managed fund that specialises in the property sector.

In the same way that a managed fund will invest across a range of companies, an A-REIT will do the same on your behalf in the property sector.

There are different types of A-REITS – those that invest in a mixture of retail, office, commercial and industrial properties – and those that specialise in one type of property class.

A-REITs can be very attractive as they provide access to assets that may be otherwise out of reach for individual investors, such as large-scale commercial properties.

A-REITs may also appeal to investors looking to diversify their portfolio into property with potential to receive a regular and consistent income stream via distributions as well as enjoying the capital growth of the property assets that the trust owns. Similar to shares, A-REITs offer an opportunity to invest in property while retaining the advantage of liquidity in investing.

Global Real Estate Investment Trusts

As the name suggests, Global Real Estate Investment Trusts (G-REITs) invest in property internationally whereas A-REITS invest within Australia.

With the Australian economy representing roughly only 2.5 per cent of the global economy so it makes good economic sense to look overseas as well as domestically when it comes to investing in real estate investment trusts. America and Europe particularly offers significant investment opportunities across a range of property types beyond those available in Australia including universities and hospitals.

Single property investment

Another property investment option that presents itself on occasion is the single property investment.

In this instance, specialist property managers form a single purpose company or unit trust which purchases, manages and maintains a particular building, usually commercial. It may be a new building, although usually they are already built and tenanted.

This presents as a potentially highly attractive investment opportunity, especially in instances where the tenants are considered highly reliable (such as government) and on long term leases.

Investors buy shares or units in the into the single purpose vehicle and after the expenses of maintenance and management receive regular distributions from the rental income of the property.

Single property investment options are only suitable for those willing and able to commit to a long-term investment of possibly five to seven years.

Proper advice for property investing

Property is a crucial part of a well-balanced and diversified portfolio.

Whether you are considering buying a property outright, investing via shares, investment trusts, single property investments or other options, Falconer Advisers has the expertise to assist in helping you make choices that suit your immediate, medium, and long-term financial objectives.

To find out more about investing in property, please call me on 03 9600 4111 or email me on robert@falconeradvisers.com.au.