BrickX offers an innovative way to invest in property without massive start-up costs.
As house prices continue to grow, property investment moves further and further out of reach for many Australians. Buying a property as an investment involves some massive up-front costs that can be difficult for many people. Investment platform BrickX offers an alternative way to invest in property via fractional investment.
Listen to our podcast interview with BrickX CEO Anthony Millet about how BrickX works
Skip to [43:04] to listen to Anthony.
More timestamps from the BrickX podcast
- [48:32] - How many bricks do people buy?
- [50:29] - Can you buy enough bricks to fully own a property?
- [53:35] - Who are BrickX’s competitors?
- [55:00] - The property’s BrickX is selecting
- [56:14] - BrickX’s fee structure
- [58:05] - BrickX’s plans for the future
- [59:05] - BrickX vs REITs
- [1:02:02] - How BrickX responds to user feedback about property
- [1:04:34] - Can you rent the BrickX property that you’re investing in?
- [1:05:12] - BrickX’s goal
- [1:05:15] - How to invest with BrickX
- Download the episode here by right clicking this link and clicking 'save link as'
- Stream the episode on a separate page here
What is fractional investment?
Fractional property investment allows you to enjoy many of the benefits of property investment without the high up-front cost. Fractional investment pools funds from a large group of investors to purchase a property or properties. All the investors share in the rental income and any capital returns from the property proportional to their original investment.
A simple way to think of fractional investment is buying shares. For example, if a group of investors wanted to buy a property at a cost of $1 million, they could divide the price of the property into 10,000 shares at a cost of $100 each. Investors would then receive a return proportional to the number of shares they owned in the property.
What is BrickX?
BrickX is a fractional investment platform that focuses on residential property. The company buys residential properties and splits the cost of the properties into 10,000 “Bricks”. Investors can then purchase Bricks at a price based upon the value of the property.
What does BrickX offer?
BrickX allows investors to browse through properties owned by the platform and purchase a share at a price determined by the value of the property. Investors can view each property’s monthly rental yield and expected return on investment.
Purchasing Bricks provides investors with a fractional share of a residential property. BrickX investors can then make money in two ways. First, monthly rental income generated by the property is divided between investors based upon the proportion of the property they own. BrickX handles all property management duties and collects rent from properties owned by investors. Funds from rental income are paid into an account known as a BrickX Wallet within 10 days after the end of each month. This provides an ongoing source of income for BrickX investors.
Investors can also make money on the capital gains of the property. Valuations are performed on BrickX properties semi-annually, and the value of the Bricks associated with the property changes accordingly. Investors in BrickX can monitor these changes via a platform known as a BrickX Portfolio. Should an investor want to cash in on capital returns, they place their Bricks on sale on the BrickX platform, allowing other investors to purchase them.
How do I get started with BrickX?
If you think BrickX sounds like a good investment platform for you, visit their website where you can sign up for an account. You will be required to pay a $75 deposit, which includes a $10 application fee. The $10 will be returned to your BrickX Wallet upon creation of your account. You can then browse available properties to see the cost per Brick, the monthly rental yield and the expected return on investment. You can then add funds to your BrickX Wallet to purchase Bricks.
When you buy or sell a Brick on BrickX, you will be charged a 1.75% transaction fee. There is also a 6% per annum property management fee, which is deducted from rental income. The company also charges $0.09 per Brick as a yearly audit and valuation fee.
Before investing with BrickX, make sure to read the full product disclosure statement available on its website. As with any investment, it’s wise to seek independent advice before making a decision.