By Cam Harper*
Property investing can be a great way to grow your wealth, but owning property comes with its own set of challenges and risks. Fortunately, there’s a way to achieve your investment goals without the headaches of ownership.
Peer-to-peer property investment offers a way to gain exposure to real estate without the need to purchase an entire property. Instead, investors register with a peer-to-peer lender, like Southern Cross Partners, which then pools investor funds to finance property loans. Investors earn income through interest paid by the borrower.
This type of investment allows you to enjoy the benefits of property investment, such as regular, enhanced returns, without the hassles of maintenance, tenant management, or the large upfront costs usually associated with buying property.
But it’s important to choose the right partner for these kinds of investments.
Choose a regulated provider
Investing your hard-earned money can be daunting, especially with the number of options out there. Not all investment avenues are created equal, and some can have significant red flags that aren’t visible to the untrained eye.
The smart first step is to check if they’re regulated. Financial investment providers are overseen by the Financial Markets Authority (FMA). Licensed investment providers, like fund managers and peer-to-peer lending platforms, have to follow strict rules set by the FMA to keep investors safe from dodgy practices.
A quick search on the financial service providers registry will provide a comprehensive list of licensed providers. Always read the product disclosure statement, or get a financial advisor to read it, so you fully understand the product being offered.
If an offer seems too good to be true, it probably is.
Check the financial health of the provider
If you want to find out about the financial health of a provider, you can look at their publicly issued financial statements. Large New Zealand providers are required to prepare, audit, and publish their financial statements, which can be accessed via the Companies Office website. This provides a good vantage point to assess stability and long-term viability of the company.
Smaller New Zealand companies aren't required to disclose or audit their accounts, so, if you can't see any financial statements online then the tried-and-true phone call should do the trick.
Shop around for the best fit for your investments
Engage with different providers. The ability to speak or meet with a real person reflects a company’s accessibility and transparency. One conversation with an investment team member can provide valuable insights and help you gauge the company’s business practices and values.
Don’t hesitate to ask questions. Inquire about their history and performance, as well as if there have been any instances of investor losses, their investment selection process, fees, and whether they have a physical office where you can meet someone in person.
Why Southern Cross Partners?
At Southern Cross Partners, our door is always open. We’ve been partnering with Kiwi investors for more than 28 years, and while past performance doesn’t guarantee future results, we are proud of our flawless record looking after investors funds.
As New Zealand’s largest property-backed peer-to-peer lender, our conservative approach to lending has consistently delivered regular, enhanced investment returns.
All our investments are secured by first mortgages. Investment rates start from 7.00%* p.a., with a current minimum investment of $10,000*.
For more details visit www.southercrosspartners.co.nz
*Subject to change and availability
Southern Cross Partners is licensed to provide peer to peer lender lending services under the Financial Markets Conduct Act 2013. This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. We recommend you speak with a financial adviser before making any investment decisions.
* As Managing Partner of Southern Cross Partners, Cam Harper leads both the lending and investing sides of the business. He is passionate about helping New Zealanders achieve real financial freedom through specialised lending and secured investments.