What are the steps involved in starting or joining a Property Circle?

How am I matched to an existing Property Circle?

• We use an algorithm to best match you into a suitable Property Circle to suit your needs.
• You just need to tell us on your profile what you are trying to achieve and we will find the right people for you. i.e. The type of property, how much you want to invest annually.
• My Property Circles will match everyone to maximise success with lending and investment goals.
• For example, person X wants to do international and local investing, and can offer high income, so they will get matched with someone with assets, and/or international connections.
• We match the right mix of people to ensure we are making it as easy as possible for the Property Circle to meet the banks criteria for lending.

Directors are required for each Circle – What does this mean?

• For each Property Circle there must be a nominated Director. This person would be expected to be the guarantor of the loans within the property circle and required to have good credit history.
• The director will be paid for their service via a percentage of the equity built within property circle or a set fee. This is determined by the group and set in the mandate.

What are the Rules (or Mandate)?

• The key to success is to have very strict criteria on the rules. As a ‘Property Circle’ you need to decide what you are willing to buy, and how much you are willing to spend.
• This is all written up in a legal document, and everyone sticks to the rules.
• There will be an independent chairman, who meets with the group and keeps everyone focused and on track.
• It’s very much run like a company, with a chairman, treasurer, secretary.

Who operates, manages and holds assets for the My Property Circles platform?

• The properties are held in a Unit Trust structure.  The Unit Trust is owned by Unitholders ie you.
• The Trustee Company manages the Unit Trust, and is owned by shareholders ie also you
• You hold shares within the Trustee Company and units in the Unit Trust in equal amounts.  10 shares in the Trustee Company = 10 units in the Unit Trust.
• The My Property Circles team works with you and management experts to manage the day to day running of the properties, and meet any statutory requirements.

What are the benefits and risks of this type of investing?

• There are a number of positives that come with a shared approach to property investment.
  • Many investors have been priced out of the market. Using My Property Circles the amount of money needed to invest, through dividing the cost of an investment property into shares, makes it easier to purchase.
  • This method can also allow an investor to have a diverse amount of investments across multiple properties.
  • Whereas in the current housing environment being able to buy a property has become very challenging, My Property Circles investors get to buy shares across a wide range of properties for a small sum when compared to the full cost of the property.

• The negatives:
  • You may receive smaller returns compared to usual property investment. But hey, you may not have been able to afford to get into the property market at all, so you are winning!
  • Property is traditionally considered to be a slow burn investment strategy. While considered less volatile than other investments like shares, the returns you receive will be accumulative over the long-term and not the short-term.

Who is in control of our Property Circle?

• You are. Your Property Circle is controlled by the members (unit holders). You make the decisions as a group.

How do we meet the banks criteria for lending?

• The My Property Circles team will ensure that one of our independent lending experts are on hand to assist your Property Circle with all the loan requirements.

How are properties selected?

• Each recommended property is carefully researched by our partners at Ripe House www.ripehouse.com.au who provide simple to use data analysis, tools and commentary reports on the property market.
• They will pinpoint the best options for your Property Circle to ensure your purchasing criteria is met.
• Your Property Circle members will vote on their preferred property choice.

How are properties valued?

• The Property Circle may engage a valuer, at the circles cost, to value the properties. Generally, this valuation is done each time the Property Circle purchases a new investment.

Who pays for the expenses for the property?

• Expenses like rates, property management fee and incidentals are all paid for directly by the individual Property Circle.
• The rental income from your property is deposited into your Property Circle bank account and all expenses are paid from this account.

Are my returns taxable?

• Any returns made by your Property Circle, may affect your own personal tax situation. This will be determined by your own accountant.

Are there any fees involved?

• There is a once off set-up fee of $7,500
• There is a Circle administration fee of $1,500 per annum, per property

How long do I have to remain in the Circle?

• The minimum term is 5 years. If you would like to exit before, you will be required to sell your shares to another party within your circle or choose another to join the circle (with all existing members to agree)

At the end of the five-year term what happens?

• Default – Sell all Properties. Divide between all unit holders
• Or, if all members agree;
  • Renew for another five years, and add more properties
  • Take a Property Each