New market entrant BrickX has launched its online property platform and will target SMSFs as it believed it offered them an easier alternative to gain access to residential property exposure.
“Our model is to go direct and get to the trustees themselves to educate them,” BrickX chief executive Darren Patterson told selfmanagedsuper.
“In general, people want exposure to real estate in their super fund.
“Effectively, [BrickX has] the properties sitting inside trusts and you’re buying units in those trusts, which acts and behaves just like a share where you get a monthly dividend and you get to buy those units in those trusts and that’s where your capital gains come from.”
BrickX currently had 20,000 “bricks” being traded from two residential properties located and leased in Sydney.
The business was established in the second half of 2014.
The property platform went live at the end of February and was originally open to individual wholesale investors.
“We’re still currently only licensed for wholesale, so it will be wholesale for SMSFs – they are part of our target market,” Patterson said.
“There are 185,000 wholesale investors in the country, which is quite small, and half a million SMSFs, so that will expand our market, and we are also pushing to retail so that it will be available for everybody, but as part of doing that and building the platform, we’re adding functionality all the time.
“I personally have been buying property through my SMSF and it is a nightmare, so I think this offering solves a problem in the market, which is that trying to buy real estate in an SMSF is overbearing.
“We have had demand for this for some time and there’s been so much interest.”
He said he expected to have between 20 and 50 properties on BrickX in the next 12 months.
“That will come down to moving into retail and getting that demand,” he said.
“In the near to short term, we’re adding fairly conservatively partly because the market is hot and we’re buying sensibly.
“We’re hoping to have thousands of properties as a three-year ambition.”
What was consistent about the properties was they were all renovated to a high level, he said.
“We’re trying to encourage people to buy property without having to go through an inspection, so we want them to be quality aspirational properties,” he said.
“And, ultimately, we want to protect the income-earning ability of the property and the capital growth and the way to do that is to make sure they’re of a high standard.”
