Property & Infrastructure Funds Unlisted Property Trusts

Discussion in 'Shares & Funds' started by The Falcon, 9th Jun, 2018.

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  1. The Y-man

    The Y-man Moderator Staff Member

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    I have been telling people who have asked me (they know who they are!) pretty much along the lines of REITs in favour of resi prop. For those with a bit more risk appetite, bank shares which are getting hammered, but at the end of the day, I believe they will keep making money - albeit not in the same amount - and probably be safer as a result of less dodgy loans and new regulatory measures.

    I do emphasize however it's only my opinion and not the outcome of some heavy research.

    The Y-man
     
  2. Nodrog

    Nodrog Well-Known Member

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    There are all sorts of valuation metrics for property but old fashioned yield is a simple but effective one. I’ll ignore Resi property in this thread but commercial property valuation on average here and globally appear to be stretched. Having owned and experienced listed property through an index ETF along with a few stapled securities and other property related shares like Mirvac, Westfield and Lend Lease prior to and during the GFC I personally would be wanting a higher yield than what’s on offer now.

    Then again I’m no expert on commercial property.
     
    Last edited: 21st Dec, 2018
  3. Bigchrisb

    Bigchrisb Member

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    I've been putting a little money into these sort of syndicates, but the last month have been loading up on VAS and vgs. Indeed I transferred some more cash from an investment loan to buy another parcel. At current valuations I'm putting money into stocks for preference.
     
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  4. orangestreet

    orangestreet Well-Known Member

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    @Bigchrisb, welcome. Glad that I could persuade you to post over here. Peeps, this guy is a star! Exactly the kind of guy who gives the FIRE movement a good name. Having read his FIRE journal elsewhere, be in no doubt that he will significantly add value to any discussion on investing. And he sings from the same hymn sheet regarding residential property as many of us here; I.e. not a fan. :)

    And he is a Canberran too (living overseas currently). What is not to like??!!
     
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  5. Nodrog

    Nodrog Well-Known Member

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    Welcome @Bigchrisb.

    I occasionally pop into Money Moustache (Australian Investing Thread) every now and then and have noted some great posts of yours. I wasn’t aware you had a FIRE Journal thread, would love to read it. Just a lurker (not a member) on MM but some great stuff there. I figure I already do too much talking here so don’t want to be a pain in the ar*e on multiple forums:).

    Oh and how I love Resi Property, NOT.
     
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  6. Big A

    Big A Well-Known Member

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    Is the commercial property section for the anti resi members?
    I was once a hardcore resi property only person. But the returns to pain in ass ratio off resi property has really turned me off it. Now I’m a property trust fan boy and slowly warming up on equities.
     
  7. Nodrog

    Nodrog Well-Known Member

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    Lol, no.

    We also owned a swag of Resi property in the past. You nailed it with the pain the ass factor. I’ve been an equities fan for decades but due to my wife’s employment at one stage we couldn’t own equities so invested in Resi property during that time. Bloody hated it.

    For us It’s all about income, mostly dividends. And the less work the better hence why I only invest in listed funds nowadays. Set and forget, enjoy life and pop in here for a chat out of interest.
     
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  8. Big A

    Big A Well-Known Member

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    I see where your coming from Nodrog. 3 years ago when I sold off most of my IP and ventured into the property trusts / equities side I really wanted to micro manage the process even though I signed up with a financial adviser. 3 years in and a few different investment structures later e.g trusts / companies and now I’m thinking is this all going to become a pain to manage.
    In saying that at the moment I don’t mind the work involved and god willing I keep growing the investments that one day I can make a full time gig out of managing the different investments and structures.
     
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  9. Nodrog

    Nodrog Well-Known Member

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    He he, sounds somewhat familiar.

    We’ve been retired awhile and as of next FY (I’ll be 59, wife 56) we will finally have wound down all our structures excluding the SMSF. From two discretionary trusts, one hybrid discretionary trust, SMSF, related company for each structure and assets in single names TO simply assets in a SMSF and Joint Names. Apart from getting sick of maintaining it all after being be involved in handling a few family deceased estates I definitely wanted it made simple.

    Across these entities has been about a dozen Resi properties, over 40 stocks and listed funds, a pile of loans / LOCs and cash. Now we’re debt free and hold just eight listed funds (really only six different funds as two funds are duplicated across entities), cash and term deposits.

    My goal has been to get to the stage where we have enough assets (income in our case) where my full time job is NOT having to manage hardly anything:). Thankfully other than the SMSF the rest is near set and forget except for regular top ups.

    Doesn’t mean to say I don’t have a great interest in investing. But that’s independent of our portfolio which is kept rediculously simple. The interest aspect can be turned off in an instant if life throws a curveball. Complex structures / portfolio can’t be turned off, they need to be managed / maintained. And I’m not just thinking off myself but my heirs who will be left behinds to try to sort it all out.

    Have been enjoying your posts, great to have you here.

    Funny in that two new members here both have BIG in their names:).
     
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  10. Big A

    Big A Well-Known Member

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    Why thank you Nodrog. Enjoying the banter myself.
    The big comes from the fact that I have been weight training with a body building mentality for just over 20 years now. Like to think of myself as reasonably big in a muscular sort of way of course. Still in the gym 5 days a week and fairly disciplined with the diet. Getting harder as I get older. The body can’t handle the punishment as well as it use too.

    Now I’m trying to put the same disciplines and dedication I put into the training over the last 20 years into building wealth rather than muscle.
    I still have a long road ahead with 2 young ones just starting of there schooling. Private school fees are like ransom.

    Reading your investment strategy and changes as you get older is really making me question my strategy. In a good way of course, I might have to keep the keeping it simple strategy in mind moving forward and as the portfolio continues to grow.
    My equities portfolio at the moment is made up of approximately 12 different managed funds with the likes of Macquaries IFP , Magellan global fund, Pengana aus equities funds and the likes. This was all set up and recommended by my advisor using the bt wrap platform. One of those 12 funds is the vanguard aus index fund which was added this year. I’m going to have to review how the managed funds have performed compared to ETFs to see if the extra fees paid between the fund managers , advisor and platform are working in my favour.

    Now I’m starting to get of the commercial property topic. I’ve covered off family, excersice and stocks. This is what my Saturday nights have come to.
     
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  11. Bigchrisb

    Bigchrisb Member

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    Thanks for the welcome! Yep, I've been active previously on ERE then MMM. My journal there (same username) has a whole lot of back story. I've been lurking here for a few months but not posted until now. My desired asset allocation has been changing, both as the portfolio grew, as I aged from 20's single to 30's married with a kid, and particularly in the last year as I've been trialing living off investments while overseas (technically my wife is still working and posted here, so call me a full time dad for now). I'm mostly interested in boring index and LIC acquisitions now, and I'm much more gun shy on just how much leverage I'm prepared to use (have used a lot of margin and home equity in the past). I'm currently at about 15% total LVR and am prepared to let this creep back up to my current loan limits (equal to about 30% LVR) if things looks to be in crisis mode on the stock markets.

    Back to unlisted RE, I like syndicated individual assets. You can form your own opinion on the virtues of the individual asset, and they get to an asset class that is otherwise hard to access (buildings in the 10's of millions of value, above most individuals/smsfs, but below the institutions). Part of my old career was had many of the syndicators as clients, so I feel I got to know a bit about the assets and the culture of the operators.

    That said, commercial property has had a massive run - just look at cap rates at the moment vs a few years ago. There are a few pockets where value appears to be arriving however. The themes I'm thinking about are the tightening of credit access (terms are harder for commercial just as they are for resi), so some forced sales due to that. There are also a number of older buildings (mostly office) that were bought by developers with the intention of converting to apartments or using as a development site. No longer so attractive as a development site, and they have let the leases wind out / site run down as an office asset. Good potential for some value add to these type of assets.
     
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  12. Scott No Mates

    Scott No Mates Well-Known Member

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