And why great fund managers won’t mind you asking…
Investing in a property fund can be one of the most effective ways to generate passive income and build long-term wealth. But not all funds are created equal. Here are some key questions to ask when assessing an investment opportunity to help minimise risk and select an option that suits you.
- What’s the fund’s overarching strategy, and how has it performed in different market conditions?
Understanding how a fund generates returns and its high level results is step one. But it’s just as important to ask whether that strategy has been tested across a variety of market cycles – not just during a boom. - Who’s behind the fund, and do they have real skin in the game?
You’re investing in people as much as property. Who makes the decisions, what’s their track record, and are they personally invested alongside you? If they’re not invested alongside you, they’re in it for the fees – meaning your interests are not aligned. - What are the risks, and how are they managed?
No investment is risk-free. If a manager avoids this question or gives only vague reassurances, that’s a red flag. A credible fund should be able to clearly articulate its risk profile and mitigation strategies. - What are the liquidity terms – can I exit if needed?
Find out how long your capital will be tied up, under what conditions you can exit, and whether there are penalties or limits on redemptions. - What fees will I pay, and when?
Fee structures should be transparent and fair. Look closely at both management and performance fees, and ask how they align with investor outcomes. Are reported returns before or after fees? - What kinds of properties is the fund targeting, and why?
Strong investments start with strong assets. Ask whether the fund is focused on hype-driven acquisitions or properties with real fundamentals – such as high underlying land value, design flexibility, and long-term tenant resilience. - How are investment decisions made?
Is there a clear and rigorous process behind acquisitions and strategic asset management? Who sits at the table, and how are decisions validated? - Who are the tenants, and what makes them resilient?
Your returns depend on occupancy. Ask about the calibre of tenants, lease structures, and how the fund ensures stability or re-leasing strength in changing conditions. - How will I be kept informed as an investor?
Transparency shouldn’t stop once you’ve decided to invest. Ask what kind of reporting and updates you’ll receive, and how often you’ll be kept in the loop. Will you have online access to your investment information? - What happens when things don’t go to plan?
Every investor deserves to know how a fund handles challenges. A confident, experienced team will have examples of how they’ve adapted, recovered, or learned through less-than-perfect scenarios.
A Final Note
One of the benefits of property as an investment, is that it’s a tangible asset – meaning that you can assess it first hand. Do a site visit and judge for yourself – is it well maintained, fully-leased? Does what you see match what you’ve been told?
And finally, sleep on it. See if it passes the gut check. If it doesn’t feel right and/or your questions haven’t been answered, don’t proceed – there are plenty of alternative investment opportunities.
Asking the right questions isn’t just about protecting your capital – it’s about finding a fund manager that shares your values. We view due diligence as a two-way conversation. We encourage it, we expect it, and we’re comfortable with it because we’re proud of our approach.
We hope this helps your decision-making process and if you’re exploring investment opportunities and want a clear, straightforward conversation, we’re always open to talking.
