DomaCom Limited is the first fractional investment platform in Australia listed on the Australian Securities Exchange.
Getting into the property market is still a big goal for all Australians, but many feel this goal is quickly moving out of reach as property prices continue to increase. The DomaCom Fund offers an alternative to standard property purchasing for investors.
DomaCom is a fractional, or crowdfunding, property investment fund that allows you to purchase a share in a property, similar to buying a share in a company. This lets you get into property investment without the huge up-front or ongoing costs.
What is fractional investment?
Fractional property investment is for people who want to get involved in property investing, but can’t afford the upfront costs or are worried about putting all their funds in one major investment. With fractional property investment, you can put small amounts of money into multiple properties in multiple areas or property types, which allows you to benefit from varying rental markets.
This style of investment is similar to buying shares in a publicly listed company. Multiple investors pool their money in order to have ownership of the property proportionate to the investment each individual made. Any returns or regular income generated by the property is also paid out to each investor proportional to the amount they invested.
What is the DomaCom Fund?
The DomaCom Fund is a managed investment fund that allows investors to select from a range of properties that they would like to invest in. Through the use of a bookbuild process, the DomaCom Fund collects the funds from multiple investors interested in purchasing a property. Once the bookbuild is complete, the property is purchased and placed in a sub-fund.
All due diligence on the property is completed by the DomaCom Fund when the bookbuild hits 30%-50% of funding. Any due diligence costs are passed onto the respective investors in the bookbuild.
What does DomaCom offer?
DomaCom offers investors the option to invest in residential, commercial, rural, retail, industrial and resort property lists. You can create your own portfolio by selecting the properties yourself or you can choose one of the Model Portfolios.
Model Portfolios consist of diverse residential properties on offer through DomaCom. All properties have been pre-selected based on different investment strategies, and some Model Portfolios may have a minimum investment amount. DomaCom also offers a platform to sell your units or purchase other investors’ units.
How do I get started with The DomaCom Fund?
If you are interested in investing in property through the DomaCom Fund, you will need to apply to get access to the DomaCom platform. To start investing, you will need an ANZ bank account so you can put your investment funds in an interest-bearing cash pool within the DomaCom Fund.
Once you have deposited your funds, you can begin bidding on bookbuilds. After the bookbuild funding for the property is complete, DomaCom will send you a Supplementary Product Disclosure Statement that outlines the details of investing in that specific sub-fund for that specific property. This supplementary statement provides all the information you will need to make an informed decision before finalising your investment.
You will then be asked to accept the offer to invest in the bookbuild. You are not bound to invest in this bookbuild until you accept the offer. After the fund advisors receive offer acceptances from all investors in a particular bookbuild, the property will be purchased.
Before you can apply for access to the DomaCom Fund, you will need to read the full product disclosure statement available on its website. It may also be advisable, as with any investment, to seek independent financial advice.