Direct property ownership as an investment strategy has traditionally been a cornerstone of wealth preservation and growth – owning residential or commercial property has provided families with tangible assets that can be passed down to the next generation and leveraged for financial security. However, the landscape of wealth management is evolving. We’re seeing an increasing number of families step away from direct property ownership in favour of partial ownership and outsourced investment managers.
Unlike previous generations, who often accumulated and directly managed property portfolios, investors are now recognising the challenges of hands-on property ownership and are reluctant to pass on this burden to their children. Families are now prioritising flexibility, efficiency, and diversification in their investment strategies.
Challenges of Direct Property Ownership
Managing property can be complex and resource intensive. Ongoing attention must be given to tenant management, property maintenance and compliance in order for risk to be managed, and value to be optimised. Furthermore, external advisors required to address items such as leasing contracts, GST compliance and fire regulations pose additional costs – both in terms of money and coordination/management time. Understandably, families are realising their children in the next generation may not have the time, interest or skillset required to manage their investment properties effectively and extract value.
With these challenges in mind, many investors are shifting towards the more streamlined approach of professionally managed property syndication, and in turn, are enjoying higher returns with minimal effort and creating generational wealth while their children can focus on their own careers and growing families.
Outsourced Investment Management
Property syndicates allow investors to own a share of high-quality property assets without the demands of direct management. Key benefits include:
- Steady Passive Income: Investors receive regular distributions from rental income without managing tenants.
- Expert Management: Professional fund managers handle tenant selection, lease negotiations, and maintenance, ensuring the property asset performs optimally.
- Diversification: Syndicates allow investors to spread risk across multiple properties rather than tying capital to a single asset.
- Scalability: Investors can choose different levels of participation across various assets and timelines without the constraints of direct ownership.
We’re supporting many of our current investment partners in the transition from direct property ownership to property syndicate investment. If you’re interested in exploring the move to a passive investment strategy, please feel free to get in touch for a chat. By conducting rigorous due diligence and actively managing assets, we ensure that our investors benefit from above market returns while avoiding the stress of direct ownership. Our expertise in tenant selection, lease structuring, and risk management allows our investors to enjoy the rewards of commercial property ownership and establish an investment portfolio for future generations, without the burden.
