Instantly invest in Australian residential property for less than $100.
If you’re interested in starting an investment property portfolio, but you don’t have enough money to afford some of Australia’s astronomical house prices, you might want to take a closer look at property investment platform BRICKX. This innovative provider allows everyday investors to acquire small shares in residential investment properties for less than $100, providing investment income from rent and capital growth.
So how exactly does BRICKX work and how could it benefit you?
What is BRICKX?
Founded in 2014 by Markus Kahlbetzer, the CEO of BridgeLane Group, BRICKX partnered with Theta Asset Management Limited to create this unique online property investment platform. Officially launched in 2016, BRICKX allows investors to buy and sell ownership portions in Australian residential properties.
How does BRICKX work?
Promoted as an online stock exchange for residential property, BRICKX offers a simple and low-cost way for investors to break into the property market. In much the same way as traders use stock exchanges to buy and sell shares in companies, BRICKX allows its customers to buy and sell individual shares (known as Bricks) of residential properties.
How it works is actually quite simple:
- BRICKX buys properties. A team of investment and property professionals select each property to deliver a diversified selection of investment options.
- Each property is divided into 10,000 Bricks. Brick is the term the provider uses to describe an interest (unit) in a BRICKX Trust. Each trust holds a single investment property which is split into 10,000 Bricks, and those Bricks are then sold to investors. One Brick represents a 1/10,000th beneficial interest in the property.
- Those Bricks are sold at purchase cost. For example, if the purchase price of an investment property was $1 million, once it had been divided into 10,000 Bricks, each individual Brick would cost $100.
- You earn income. If you hold a Brick in any BRICKX property, you will receive your share of the net rental income at the end of each month. You can also sell your Bricks at any time to take advantage of capital gains provided by any rise in the property’s value.
How do I invest and make money with BRICKX?
Once you’ve signed up for an account with BRICKX (see instructions below), you’ll need to follow the steps below to get started in the property market:
- Choose your property. You can browse and choose your properties from BRICKX’s range of investment properties. BRICKX provides details such as investment yields, independent valuations, transparent financial costs, forecast cash flow and an Investment Case to help you make your decision.
- Buy your Bricks. You can choose your property within a matter of minutes and then instantly buy Bricks in that property. Rather than a direct investment in the property, these Bricks represent an indirect investment in the BRICKX Trust in which the property is held.
- Earn rental income. At the end of each month, BRICKX pays monthly rental distributions to all Brick holders. You receive your share of the net rental income, which is the gross rental income minus expenses such as strata levies, council rates, maintenance costs and debt repayments.
- Sell your Bricks for capital returns. BRICKX arranges for independent property valuations to be performed semi-annually, so you can monitor the rise or fall in value of your Bricks through your account. You are free to sell your Bricks at any time and take advantage of the capital returns on offer.
- Expand and diversify your portfolio. You can continue investing in Bricks to create a larger, more diversified property portfolio.
What fees does BRICKX charge?
There are three types of fees you should be aware of when investing with BRICKX: an application fee, transaction fees and ongoing fees:
- Application fee. A one-off application fee of $10 is included in the required minimum opening deposit of $75. However, you can put this fee towards the purchase of Bricks.
- Transaction fees. You will need to pay a 1.75% transaction fee whenever you buy or sell Bricks.
- Ongoing fees. BRICKX also deducts a 6% + GST property management fee from the gross rental income of each property before monthly rental distributions are paid. A $75 per property per month fee, which equates to a monthly fee of $0.0075 per Brick, also applies to cover audit and valuation services.
What are the benefits of investing with BRICKX?
There are several benefits of choosing to invest with BRICKX:
- Low cost. You don’t need to have hundreds of thousands of dollars saved or take out a large loan to invest in the Australian property market; with BRICKX, you can get started with less than $100.
- Instant ownership. When you buy a Brick in a BRICKX property, you can choose the property you want within minutes and enjoy instant ownership.
- No hassle. You don’t have to worry about finding a reliable property manager or taking care of the property’s maintenance yourself. BRICKX handles this side of the equation for you.
- Transparency. From the fees charged to the financial information supplied for each investment property, BRICKX provides all the details you need to make informed investment decision.
- Two forms of income. Investing with BRICKX allows you to take advantage of rental income and potential capital growth.
- You’re free to exit whenever you want. You can sell your BRICKX quickly and easily at any time.
How do I sign up with BRICKX?
If you’d like to sign up for an account with BRICKX, click the “Sign up” link on this page to be taken to the BRICKX website. Once there, you can register for a free account in a couple of minutes. Registration is available to individuals and to self-managed super funds (SMSFs).
However, you must meet a few simple eligibility criteria:
- Age. You must be at least 18 years of age.
- Residency. The platform is available to Australian residents only.
Once you have set up an account, you will need to become a member so that you can buy Bricks. To do this, you will need to do the following:
- Provide ID. You will need to provide your name, date of birth and address. You will then need to verify your identity with an external third-party provider.
- Deposit funds. You will need to deposit a minimum of $75 applies, which includes the $10 application fee.
You can then start browsing properties and purchasing Bricks.
Your questions about BRICKX answered
Is there a limit on the maximum number of Bricks I can hold in any one property?
Yes, the maximum number of Bricks you can hold in any property is 500 Bricks, or 5% beneficial ownership of the trust.
Do I have the same rights over the property as an ordinary property investor?
No. You do not have any say over who rents the property, nor can you unilaterally decide when it is sold. You also cannot list the property as security for a debt or make any changes to the property.
Am I locked in for a set time period?
No, you have the right to sell your Bricks at any time. You can list bricks for sale 24/7 through the BRICKX website.
How long will it take to sell my Bricks?
The median selling time for Bricks is 3 hours and 1 minute.
Will I need to pay tax on my investment returns?
Yes. BRICKX will provide you with a statement outlining the distributions, interest and depreciation allowances you have earned, net of its fees, at the end of the financial year.
Is there a minimum investment amount?
Yes, you will need a minimum deposit of $75 to start buying Bricks.