Former Praemium chief executive Arthur Naoumidis has launched a unique internet-based vehicle to facilitate investments in residential property.
In what is considered an industry first, Naoumidis' new company DomaCom will allow individuals and structures such as self-managed superannuation funds (SMSFs) to employ the technique of fractional investing to the residential property market.
In providing this capability, DomaCom is looking to increase better transparency and liquidity to the residential property market and allow more prudent and tailored allocations to this asset class.
In particular, the ability to invest in fractional interests in residential property will help investors avoid having to choose between holding no residential property in their portfolios or holding too much of it.
"To this point in time it has not been possible for most investors to do this unless they're coming from a substantial portfolio base. For example, the average balance in an SMSF is about $1m. If the asset allocation for a portfolio to real property is 15 per cent what can they buy for $150,000?" DomaCom founder and chief executive Arthur Naoumidis said.
"In most cases therefore portfolios are either underweight having no real property, or they are grossly overweight to 80% or 90% having an entire property in the portfolio."
"While there are a few options for property, like syndicates, pooled unlisted trusts and REITs (Real Estate Investment Trusts) these products are either quite expensive, lack choice and transparency or are difficult to trade," he said.
According to Naoumidis the DomaCom platform will provide a more cost effective means for advisers to establish a retail property investment strategy in comparison to pooled trusts and other existing structures.
Former Praemium company secretary Cath Nolan, and former director of sales and marketing Warren Gibson are also part of the new organisation.
Further developments to aid advisers and their clients invest in residential property will be released in the months to come.
