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Australians can now invest in Sydney property for less than $100

clock icon May 1, 2017
tag iconSydney Property

While saving a deposit for a home is becoming a challenge for many, others are buying into the market one brick at a time.

BRICKX gives Australians the opportunity to invest in houses for as little as under $100 per brick.

The company launched in September 2016 and has since purchased and sold bricks for eight properties.

Tegan Lawson, a 33-year-old single mum currently renting in Sydney, says she can’t afford her own home, but instead owns shares in real estate in Bondi, Annandale, Double Bay and Enmore.

“It looked like I’d never be able to get into the property market,” Tegan told Domain. “Even though it’s only a minuscule part of a property it feels like a step.”

How Brick-X works

Brick-X purchases the property and converts into 10,000 units, AKA bricks. The company then sells the bricks for the cost price of the asset. For example, a property bought for $1,000,000 divided by 10,000 units will be sold for $100 per brick.

How do investors make money?

Investors make money from the rental return. At the end of every month shareholders are paid a cut of the net rental income into their BRICKX wallet. The payment is made within ten days of the last calendar day of the month.

The rental return of each property is calculated as follows:

Gross Rent Income –
(strata levies + water rates + council rates + maintenance + management fees + annual audit and valuation fees + property taxes + debt interest + principal repayments + other costs)

10,000 Bricks

One of BrickX’s first properties was this sone in Parriwi Road, Mosman. Picture: SuppliedSource:Supplied

One of BrickX’s first properties was Parriwi Road, Mosman. Picture: Supplied

What fees are involved?

Speaking to Domain, Property Investment Professionals of Australia chair Ben Kingsley warned anyone looking to buy in to the market through Brick-X should be aware of the fees involved.

The BRICKX website explains there is a ‘simple’ fee structure.

“BRICKX charges a 1.75% transaction fee when you buy or sell your Bricks.

“In addition, as part of an individual property’s expenses, a 6%+GST property management fee is deducted from the Gross Rental Income of each BRICKX Trust (before making distributions to Brick Holders, if any), and $75 per property per month fee (equating to $0.0075 per Brick per month) to cover annual audit and valuation services.”

To download there most recent product disclosure statement click here.

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