Investing in a Property Management Trust

People like property. You can see it, touch it, feel it. As an investment, it’s easy to make sense of. At Thrive Financial, our clients often find comfort in tangible assets like property, and whilst property investments are relatively straightforward to comprehend, integrating a single property into an investment strategy can complicate matters. We recently spoke to Nicole Ott from Trilogy Funds to answer all of your frequently asked questions about investing in a Property Management Trust!

What are the benefits of a pooled mortgage trust compared to a single property investment?

A Pooled Mortgage Trust involves pooling investor funds to provide exposure to a collection of mortgages within the trust. Earnings from these mortgages, combined with other trust income, are distributed among investors based on the units they hold in the trust (units are allocated based on the invested amount).

Here are some potential advantages of investing in a Pooled Mortgage Trust over owning a single property:

Professional Management:
Trusts are managed by experienced fund managers who handle mortgage acquisition, administration, and ongoing management on behalf of investors.

Competitive Income:
Mortgage trusts are designed to offer competitive income through regular distributions.

Portfolio Diversification:
Mortgage trusts contribute to a diversified investment portfolio. They provide heightened diversification compared to single property investments by spreading loans across various factors like borrowers, locations, property sectors, project types, stages, sizes, and Loan-to-Valuation Ratios (LVRs).

What are the potential returns from a Monthly Income Trust?

Though past performance doesn’t guarantee future results, our flagship fund, the Trilogy Monthly Income Trust, has operated successfully for over 16 years, delivering monthly distributions since its inception in February 2007. As of the month ending February 28, 2023, the Trust offered an annualized net distribution rate of 7.15% per annum.

What is the advisable investment timeframe for a managed property portfolio?

The Trilogy Monthly Income Trust aims for returns over the medium term (2 – 5 years). The recommended minimum holding period is 2 years. Investors have the option to redeem capital, subject to liquidity. While a minimum holding of 2 months is required, a four-month notice period applies for withdrawals. Withdrawals might be processed sooner at the discretion of Trilogy Funds. Hence, investors should consider holding units for at least six months from unit issuance.

What is the minimum capital needed to start investing?

A minimum initial investment is $10,000.

Can investors continue to contribute after the initial investment?

Certainly, investors can decide whether to receive distribution income or reinvest it in the Trust. Additional contributions are possible via direct debit, EFT, and Bpay.

How volatile is the Trilogy Monthly Income Trust? Could investors lose all their capital?

The Trust seeks to provide monthly income based on net returns while maintaining a fixed unit price of $1.00 per unit. However, returns aren’t guaranteed, and there are risks associated with the Trust, potentially leading to lower-than-expected returns or capital loss. Investment involves general and specific risks associated with managed funds and investing in mortgages. Since inception, we’ve averaged net distribution returns of 7.44% per annum and hold a “Very Strong” rating from Foresight Analytics research house.

If you have more questions about investing in property – engaging a qualified and registered financial planner, like our team at Thrive Financial, is a great place to start!

Be awesome,

Rachael Yurko

Principle and Senior Financial Advisor

Wealth Preservation Strategies for Successful Business Owners

Wealth Preservation Strategies for Successful Business Owners

Running a successful business often comes with the reward of financial prosperity, but it also introduces complexities in managing and preserving that wealth. For business owners, wealth preservation isn’t just about saving; it’s about safeguarding what you’ve built while planning for growth and legacy. Here, we explore key strategies to help you protect and optimize your wealth.

1. Diversify Beyond Your Business

It’s common for business owners to have a significant portion of their wealth tied to their enterprise. While this shows confidence in your business, it also concentrates risk. Diversifying your investments into other asset classes—like property, shares, or managed funds—spreads risk and creates additional income streams that can buffer against market or industry downturns.

2. Establish a Solid Asset Protection Plan

Protecting personal and business assets from potential liabilities is crucial. Strategies may include:
Setting Up Trusts: Family trusts or discretionary trusts can shield personal wealth from business risks and offer tax advantages.
Structuring Your Business: Consider using company structures that limit personal liability, such as proprietary limited companies.
Insurance: Ensure you have comprehensive insurance coverage, including key person insurance, business interruption insurance, and income protection.

3. Optimize Tax Efficiency

Tax planning is an essential element of wealth preservation. As a business owner, there are several ways to reduce your tax burden:
• Leverage small business tax concessions.
• Contribute to superannuation for long-term, tax-efficient savings.
• Explore tax-effective investment strategies such as negatively geared property or dividend-paying shares. Working with a qualified adviser ensures you’re not leaving any opportunities untapped.

4. Plan for Succession and Legacy

Whether you plan to sell your business, pass it to the next generation, or retain ownership, having a clear succession plan is essential. A succession plan ensures continuity, protects the value of your business, and aligns with your long-term wealth goals. Key steps include:
• Valuing your business accurately.
• Documenting a formal succession plan.
• Communicating intentions with stakeholders.

5. Incorporate Estate Planning

Estate planning isn’t just about writing a will; it’s about ensuring your wealth transitions seamlessly to future generations. Key considerations include:
• Establishing testamentary trusts to protect inherited wealth.
• Planning for tax implications of transferring assets.
• Reviewing and updating beneficiary nominations on superannuation and insurance policies.

6. Work with a Trusted Wealth Adviser

Navigating the complexities of wealth preservation requires expert guidance. A wealth adviser can help you:
• Create a tailored financial strategy.
• Review and adjust your plans as your business grows.
• Monitor your investments and ensure they align with your long-term goals.

7. Build an Emergency Fund

Even the most successful businesses can face unforeseen challenges. Having a robust cash reserve ensures you’re prepared for unexpected costs without dipping into long-term investments. Aim to set aside at least six months of business and personal expenses in a readily accessible account.

8. Stay Informed and Agile

Markets, tax laws, and personal circumstances evolve. Regularly reviewing your financial plan and staying informed ensures you’re well-positioned to adapt. Work closely with professionals who understand the latest developments and can tailor advice to your unique needs.
In Conclusion
As a business owner, you’ve worked hard to achieve financial success. Preserving your wealth requires a proactive and strategic approach that balances growth, protection, and legacy planning. By diversifying investments, optimizing tax efficiency, and working with expert advisers, you can secure your financial future and enjoy the rewards of your efforts for years to come.
For more personalized advice on preserving and growing your wealth, contact us today. We’re here to help you thrive.

General Advice Disclaimer: The information provided in this blog is general in nature and does not take into account your personal financial situation, objectives, or needs. You should consider whether the information is appropriate to your circumstances before acting on it. For tailored advice, please consult a qualified financial adviser.

Thrive Financial

Phone: 1800 431 213

1/21 Empire Crescent Chevallum 4555 QLD

ABN 80 346 511 003

The Trustee for The Yurko Family Trust T/A Thrive Financial Planning | ABN 80 346 511 003
Corporate Authorised Representative 000449875
Beryllium Advisers Pty Ltd | ABN 30 646 510 769 | AFSL 528250

General Advice Warning: The information and advice contained on this webpage and website has been prepared for general information purposes only and does not take into account your personal objectives, financial situation or needs. It is not intended to provide commercial, financial, investment, accounting, tax or legal advice. You should, before you make any decision regarding any information, strategies, or products mentioned on this website, consult a professional financial advisor to consider whether it is suitable and appropriate for you and your personal needs and circumstances. Product Disclosure Statements contain information necessary for you to make a decision whether or not to invest in financial products mentioned on this website. You should also obtain and read this document prior to proceeding with any decision to purchase a financial product. Although every effort has been made to verify the accuracy of the information contained in this document, Thrive Financial, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this document or any loss or damage suffered by any person directly or indirectly through relying on this information.