Explore 'Property Syndication' As A Powerful Investment Strategy

Do you  want to get started in property investments but have limited resources?

You might want to try property syndication, which provides you with an opportunity to invest with like-minded people and get into the property market sooner.

Even seasoned property investors use syndication as a strategy to acquire more real estate in the long-term. 

Benefits of Syndicated Property Investment

Here are the benefits of property syndication:

  • Receive income from your property faster - this is possible even if you can’t afford a property worth millions of dollars
  • Save money - syndication will reduce the required cash for acquiring real estate
  • Reduce risk - investing with like-minded individuals and in different properties will allow you to spread out the risk
  • Save time - you may partner with investors who have the skills and knowledge that can complement your arsenal

Downsides of Property Syndication Strategy

Below are some of the disadvantages you may need to face if you invest in property using syndication:

  • Lack of freedom - you may need to give up control over daily operations, decision making, and financing 
  • Lack of liquidity - you can’t just sell the property because you need to secure the approval of your partners
  • Holding period - some syndication deals may require you to agree on holding periods, which mean you cannot sell your shares within a specific timeframe

Before You Sign a Property Syndication Deal

Before you sign any contract involving property syndication, you should be completely sure that this investment strategy is well suited to your goals. 

You must carefully read the fine print, do your due diligence, and ideally consult an investment advisor to guide you through the complexities of syndication. 

Investing in real estate through syndication can be exciting, but you may lose money if you fail to plan ahead.

Frequently Asked Questions

What is a property syndicate?

Syndication in real estate is a form of direct investment, which can allow you to pool your resources with other investors. 

This is normally done to take advantage of an opportunity in a real estate market that is deemed too expensive for one investor. 

Property syndicates are often used to invest in retail, commercial, residential, or industrial properties. This strategy can also be used to acquire new properties or finance new developments. 

How can you earn money from property syndication?

The method and the amount that you can earn through property syndication will vary depending on your investment deal. 

Real estate syndications can usually earn a percentage of distributable revenue generated from rental, refinance, or sale of the property. 

The revenue can be paid as a direct split between syndicators and members or as a preferred income.

What are the forms of property syndication?

In forming a property syndication, a group of investors establish the legal entity to buy, sell, and operate real estate investments such as commercial spaces, rental units, or even agricultural land. 

Typical forms of property syndications can be limited or full partnerships, limited liability companies , or corporations.

What is the syndication process in real estate?

Syndication in the real estate market is the process of involving a group of investors to buy, operate, or sell real estate investments. 

Property syndication usually happens if an investor requires an amount that is too high for a single investor to provide or if the investor needs co-guarantors in financing the acquisition or development of a property.

Talk to a Property Investment Advisor Today 

TENX Wealth Australia has a team of investment advisors who can help you figure out if property syndication is the right strategy for your investment goals.