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Good Morning,
I enjoyed your article “A yield of 7.0% on commercial property”. I am thinking of investing some funds as an alternative to fixed deposit.
From your experience with unlisted property trusts, how secure are they? Is it easy to redeem the units if one invest $300,000 say after 6 months?
Thanks.
A: Thanks for the question and feedback on the article.
With unlisted property trusts, you shouldn’t have to worry about the “security” because they are backed by real assets (property). That doesn’t mean that the unit price can’t go down and you could lose some of your capital – but if the asset is sound and is supported by quality rental returns, you should be ok over the medium term.
Liquidity? There is no liquidity with an unlisted trust. There are no redemption facilities. In most cases, you have to wait until the trust is wound up – which usually means selling the property – and the monies are returned to the unitholders.
regards
