How to Invest in Real Estate Without Owning Property

Investing in real estate has long been seen as one of the most reliable ways to build wealth, but for many, the idea of owning and managing physical property can be daunting. High upfront costs, maintenance hassles, and market volatility are just a few of the challenges that come with property ownership. However, there are several ways to invest in real estate without actually owning a piece of property. At Rhodes Asset Management, we specialise in providing sound investment solutions. Here’s how you can get started.

Investment Options	How it works	Key Benefits
1. Real Estate Investment Trusts (REITs)	REITs are companies that own, operate, or finance income-producing real estate across various sectors. They offer a way for individuals to invest in large-scale, income-generating real estate without having to buy, manage, or finance any properties themselves.	Liquidity: Unlike physical property, REITs are traded on major stock exchanges, which means you can buy and sell shares just like any other stock. Diversification: REITs often hold a diverse portfolio of properties, reducing your risk exposure to any single asset or sector. Regular Income: Many REITs pay out regular dividends to investors, making them an attractive option for those seeking a steady income stream.
2.  Real Estate Mutual Funds	Real estate mutual funds pool money from multiple investors to buy shares of REITs or invest directly in real estate-related stocks. These funds are managed by professional portfolio managers who make investment decisions on behalf of the fund's investors.	Expert Management: Professional fund managers handle the buying and selling of investments, aiming to maximise returns while managing risk. Lower Entry Point: You can start investing with a relatively small amount of money, making it accessible to more people. Diversified Portfolio: Like REITs, mutual funds often invest in a wide range of real estate assets, spreading risk across multiple properties and sectors.
3. Real Estate Crowdfunding	Real estate crowdfunding platforms allow individual investors to pool their money together to fund real estate projects. These can range from residential developments to commercial properties. In return, investors receive a share of the profits generated by these projects.	Access to Private Deals: Crowdfunding platforms often offer access to real estate investments that are not available to the general public. Customisable Investments: You can choose specific projects that align with your investment goals and risk tolerance. Lower Capital Requirements: Many crowdfunding platforms allow you to start investing with a relatively small amount of money, making it a viable option for those who want to get started in real estate without a large upfront investment.
4. Real Estate Exchange-Traded Funds (ETFs)	Real estate ETFs are funds that track the performance of a specific index related to the real estate market. These ETFs can include REITs, real estate operating companies, and other real estate-related investments.	Lower Costs: ETFs typically have lower fees compared to mutual funds. Ease of Trading: Like stocks, ETFs can be bought and sold throughout the trading day on an exchange. Diversification: ETFs provide exposure to a broad range of real estate assets, offering a diversified approach to real estate investing.
5. Mortgage-Backed Securities (MBS)	MBS are investments that are secured by a collection of mortgages. When you invest in MBS, you are essentially buying the rights to the interest and principal payments on those mortgages. Mortgage funds can be pooled or contributory. Pooled MBS: A type of MBS where multiple mortgages are combined into a single pool, and investors receive a proportionate share of the interest and principal payments from the entire pool. Contributory MBS: A type of MBS where individual investors contribute to specific mortgages, receiving payments based on the performance of those particular loans rather than a pool.	Income Generation: MBS can provide a steady income stream, as they pay out regular interest payments to investors. Indirect Exposure to Real Estate: MBS allow you to invest in the real estate market without owning physical property, by investing in the debt side of the market.

Investing in real estate doesn't have to mean becoming a landlord or making large property purchases. With options like REITs, real estate mutual funds, crowdfunding, ETFs, and mortgage-backed securities, you can enjoy the benefits of real estate investments without the hassles of property ownership. These investment vehicles provide diverse opportunities for generating income, managing risk, and achieving your financial goals with a relatively low entry cost and greater flexibility.

Investment Opportunity

For those looking to further diversify their portfolios and earn a steady income without directly owning real estate, the Rhodes Premium Income Fund offers an attractive solution. This fund is designed to provide consistent returns by investing in a pool of secured loans, ensuring exposure to real estate assets through debt rather than direct ownership. At 8.2% p.a. to 9.2% p.a. paid monthly* (current rates for August 2024), the Rhodes Premium Income Fund offers a predictable and attractive return and represents a strong value proposition with solid mortgage-backed Australian Real Estate as security. Additionally, the fund is overseen by an independent custodian, providing an extra layer of security.

To learn more about how the Rhodes Premium Income Fund could fit into your investment strategy, download the Investment Summary here or visit our website. For further assistance, feel free to contact our Investor Relations Manager, Stephen Croll.

Stephen Croll

Investor Relations Manager

(M) 0478413147

(E) Stephen@rhodesam.com.au

Authorised Representative 1298093

Rhodes Asset Management Ltd AFSL 464772 ACN 165 917 813

* Terms & conditions apply. The Enhanced subclass rate is 8.70% p.a. and has a minimum investment of $100,000. The Standard subclass rate is 8.20% p.a. and has a minimum investment of $20,000. Please note that past performance is not a reliable indicator of future performance. This investment is not a bank deposit and carries risk. Refer to the PDS and product page on our website for more details.

The Wholesale subclass commenced 31 July 2024 and is only available to qualifying wholesale investors, with a minimum investment of $250,000 and the rate for August was 9.20% p.a. Contact us for further details.