What Is A Property Syndicate?

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Property syndication allows you to effectively grow your financial muscle by combining your resources with other like-minded investors. Not only does it allow you to get into the market sooner, but it also provides a strategy to acquire more properties in the future.

01

What Is A Property Syndicate?

A property syndicate is a type of direct property investment that brings together the capital resources of several investors. Typically this is done in order to take advantage of an opportunity that otherwise may be too expensive for a single investor.

Property syndicates can be utilised to invest in residential, commercial, retail or industrial properties. They can be used for existing properties or for new developments.

Investors make a financial contribution in return for distribution income during the life of the syndicate and/or a capital return at the end (completion and sale of the development project or winding-up of the syndicate).

Syndicates are typically established with terms that suit the objectives of the investors. However, each property syndicate will also have its own unique set of objectives. For instance, one syndicate may have the objective of acquiring distressed stock with the aim of improving (adding value) and on-selling for a profit, whilst another may look to develop something from the ground up then hold and rent or sell outright.

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02

Who Invests In Property Syndicates?

The ideal GSA Property Syndicate investor is anyone serious about investing in their future and achieving financial freedom.

Our investors include:

  • Sophisticated and experienced investors
  • People wanting to pay down their mortgage sooner
  • People with equity in property or shares
  • First-time investors
  • Those looking to grow their retirement nest egg
  • Anyone wanting to improve returns from their Self-Managed Super Fund (SMSF)
  • People wanting to help their kids with a deposit on a new home
  • Investors looking to diversify or grow their investment porfolio
  • Young couples entering the market for the first time

03

What Does A Property Syndicate Invest In?

A property syndicate can invest in a single property or a group of properties. Generally speaking, there is less risk when investing in a single property syndicate though it can provide regular cash flow, tax benefits and the potential for capital gains.

A property syndicate tends to be closed-ended (i.e. they involve a restricted number of investors and a set amount of capital to be raised). The property can be commercial, retail, industrial, rural or residential.

04

What Are Some Of The Benefits Of A Property Syndicate?

Benefit from property – sooner

You can profit from the property market quicker than you may be able to on your own. Can’t afford a $2M property? Would you prefer to have 100% of nothing, or 20%, 30% or 50% or something?

Property syndication allows you to effectively grow your financial muscle by combining your resources with other like-minded investors. Not only does it allow you to get into the market sooner, but it also provides a strategy to acquire more properties in the future.

Put simply, the more properties you have in your portfolio, the more assets you control. Controlling more appreciating assets means you have your money working for you rather than the other way around.

Save money

Joining a property syndicate reduces the amount of money you will personally require for acquisition, holding costs and development of a property.

A syndicate can also help you to be more disciplined with your funds. It can be a very manageable investment vehicle where some of your income or savings are being invested in towards your future.

Manage your risk

A Property Syndicate helps you to more easily build a property portfolio.

Regardless of how much research and due diligence you perform, the reality is that all investment carries a level of risk. This is why it’s important to build a diversified property portfolio. By spreading the risk across multiple investments, you are better positioned to weather a potentially poor performing property. Furthermore, by controlling more properties, you are improving your chance of selecting well-performing investments.

Broaden your investment criteria and minimise (potentially limiting) personal biases.

Another benefit of participating in a syndicate is that you are exposed to a greater variety of selection criteria and strategy decisions, minimising the limitation of personal bias.

Overconfidence, conservatism or loss aversion, crowd following, listening to the wrong type of influencers, framing (how information is presented), miss-information of various types, becomes less of a personal influence when you are investing as part of a group. Simply put, by having more perspectives focused on the same investment, you improve your ability to make better decisions.

Save time

A well-managed property syndicate unburdens you of your time and energy.

Running a syndicate, particularly where multiple properties may be involved can be a full-time job! Performing market research, conducting due diligence, obtaining finance, managing tenants, selecting and managing architects, builders and real estate agents, all takes a considerable investment in time and effort. It also requires experience across the multiple disciplines that many single investors simply lack.

Therefore a property syndicate not only allows everyone to leverage each other’s financial resources, but also the management team’s core capabilities and time.

Creates more opportunities

Being a part of something bigger.

Being a part of a property syndicate creates an opportunity for shared experiences. Successful syndicates typically don’t stop at one project. Furthermore, the experience of being a part of a group creates an open philosophy where the sharing is extended to building other positive opportunities outside of the property investment space.

Property syndicates are better for your cash flow.

Investing as part of a property syndicate means less of an impact on your current lifestyle. After all, what’s the point of investing in a better future if you can’t enjoy the present? Anyone who has had to service more than one or two mortgages concurrently will quickly tell you how restrictive this can be on your day-to-day lifestyle.

05

Investment Criteria

Our philosophy is to provide investors with an opportunity to participate in quality property investments that are otherwise unavailable to single, smaller investors.

Once the funds have been invested, continual monitoring is undertaken to ensure that the desired outcomes remain in focus and the project is managed prudently with the appropriate financial and regulatory controls in place. This function will be conducted through the engagement of a wide range of external specialists such as accountants, architects, quantity surveyors and legal experts.

06

Due Diligence & Evaluation

The Syndicate Manager has undertaken an extensive evaluation procedure in considering the proposed investments. In accordance with this analysis, the selection criteria is put into place to ensure:

  • Consistency with established investment criteria of the project including the use of conservative, market-based parameters such as borrowing levels, rents, capital growth, letting up periods and presale levels.
  • Developments must indicate the ability to achieve satisfactory results for the term of the investment period.

Investments will be made after due diligence has been satisfactorily completed and investment criteria satisfied. The Syndicate Manager will contract outside specialists where necessary in order to obtain qualified advice as required.

07

Keeping Track Of Your Investment

To assist with tracking your investment we will send regular information to investors which will include the following:

  • Confirming acceptance and receipt of your deposit.
  • Unit Certificate issued on payment of the balance of the investment.
  • An annual income summary will be produced to assist investors to prepare their tax returns.
  • It is not planned to have trust accounts audited, subject to the approval of investors.

08

Syndicate Wrap-Up

Typically, it is a requirement that a syndicate cannot be closed-off until the project or projects run to the end of their planned timeframe. This can vary from 18 months to 5 years or more, depending on the objectives of the Property Syndicate.

All unit holdings are fully transferable. This means that unitholders are able to sell or gift their units at any time prior to the expiry of the investment period.

Please note. The Syndicate Manager will not buy back the units in the project or procure a purchaser for any sale of units. This is solely the responsibility of the unitholder.

Our Promise to You

Investing in property can be highly rewarding and fruitful.

We want to make your investment experience as easy and carefree as possible. Not only will we provide experience and guidance, but we are also committed to ensuring you, the investor, are well informed throughout the process and that we’re here to help every step of the way.

Our associates are highly experienced and top of their game. We all want to realise great commercial outcomes, our team of professionals are dedicated to ensuring your journey is an enjoyable one.

Financial Resources and Calculators

The GSA Self Managed Super Fund Calculator
The GSA Property Syndicate Qualifier

Growth Syndicates Australia

Growth Syndicates Australia is dedicated to helping everyday Australians to improve their lives by making smarter investment decisions. As the Australian property market continues to move further away from the reach of many aspiring home owners, GSA is committed to creating innovative, effective and attainable wealth creation opportunities for its investor community.

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The information provided should be regarded as general information only, rather than as advice. It has been prepared without taking account of any person's objectives, financial situation or needs. Because of that each person should, before acting on any such information, consider its appropriateness, having regard to their objectives, financial situation and needs. All investments involve risk and before making any investment consider whether the investment is suitable for you and if necessary consult your financial advisor.