The BRICKX Platform is an online property investment platform designed to make property investment more accessible and affordable for investors.
The BRICKX Platform empowers investors to invest and transact in indirect part ownership of underlying properties in units called Bricks and enjoy the benefits of reduced investment processes and costs.
As an investor in Bricks you can benefit from the monthly rental income* and/or capital returns** of your investment properties without being concerned with the hassle of leasing and managing them.
You receive regular valuation updates of your Brick holdings, as well as access to each property’s historical and suburb data, due diligence documents and investment cases.
In addition the BRICKX Platform allows you to list your Bricks for sale when you decide.
* In the event that rental income does not cover expenses, rent may not be paid ** Property values and the Brick Price can rise as well as fall, resulting in both positive and negative capital returns. Past performance is no guide to future performance.
The BRICKX Platform is an online platform that allows you to invest by purchasing a Brick in a property of your choosing.
BRICKX seeks out properties across Australia that, in BRICKX's opinion, demonstrate the potential for positive rental income and capital returns. Once purchased, the property is held by BRICKX unit trust. Each BRICKX Trust holds a single investment property, that is then split into 10,000 units or Bricks, which are then made available to buy on the BRICKX Platform by registered BRICKX Members.
Each Brick you own entitles you to your proportionate share of any monthly distribution from the rental income of the underlying property, after the payment of all related interest and costs. (see “How are distributions calculated and paid?” question). It also entitles you to potential capital returns, which can be tracked with regular valuations and Brick Price information that is published on each property (see “Will I benefit from capital growth?” question).
You have access to detailed information on each property about its condition, type, location, suburb historical returns, independent valuations and a dedicated investment case. This information provides you, the Brick Owner, with visibility and control over your investment.Properties are selected by the BRICKX Property Team, which includes a team of a highly experienced investment and property professionals, whom meet regularly to analyse and develop the ongoing acquisition and investment strategy. Please see our Property Team Page to learn more.
A Brick is the term we use to describe an interest (unit) in a BRICKX Trust. Each BRICKX Trust holds a single residential property that is split into 10,000 Bricks which are then made available for purchase.
A Brick therefore represents 1/10,000 of the beneficial interest in the underlying property, and gives the Brick Holder a proportionate entitlement to any benefits generated after the payment of all property related costs. It is important to note that a Brick is not a direct investment in the property, but rather an indirect investment in the underlying property in the trust.
Benefits may include a potential to receive distributions from any net rental income of the property, and the potential to realise capital returns on the sale of your Bricks and/or the underlying property. You must hold at least one Brick to be entitled to a share of these benefits.
The minimum investment in Bricks per property is the minimum price of a single Brick, and you can buy Bricks in multiple properties where available on the BRICKX Platform. The maximum number of Bricks you may hold in any single BRICKX trust is 5% (or 500 Bricks).
There are some important differences between owning Bricks in a property on the BRICKX Platform and owning a property directly, which include:
- a Brick Holder that holds Bricks does not have any direct control over who resides in the property;
- a Brick Holder will not have any right to redevelop, sub-divide or otherwise make changes to the nature or use of the property;
- a Brick Holder cannot pledge the property as security for debt; and
- a Brick Holder will not be able to unilaterally determine when the property is sold (see “When is a BRICKX property sold?” question).
Affordable access- BRICKX is creating access to property investment at affordable and accessible amounts. You need a minimum deposit of $75 to begin investing in Bricks, The minimum investment in Bricks is the minimum price of a single Brick.
No property management hassle- BRICKX manages the properties listed on the BRICKX Platform, and you have absolutely no property management obligations. Experienced property managers may be engaged to assist with managing the properties, including sourcing tenants, monthly administration and repairs.
Monthly distributions and Capital Returns- Each Brick you own entitles you to a proportionate share of the property’s net income. In addition, the BRICKX Platform allows Brick investors to claim any benefits of the relevant property’s capital returns when either the Brick and/or the property is sold.
Diclosure and control- The BRICKX Platform provides information about each property, which assists you to form a view and acquire Bricks in the individual properties that you select. This is different to traditional property investment products, which may consist of a number of pooled properties, where the investor cannot choose which properties are invested in.
Diversification- The BRICKX Platform facilitates the ability to spread portfolio exposure, thus offering you the opportunity to reduce and manage the associated investment risk.
Support and expertise- The BRICKX Buying Team have market knowledge in the targeted geographical regions BRICKX considers investments in. With their expertise, properties are selected in locations across Australian cities to optimise rental yields and capital returns. In addition, BRICKX enlists experienced industry professionals, who form The Adviser Panel, to contribute to the acquisition strategy. Once acquired, BRICKX (or its property management agent) regularly reviews each property from the perspective of tenant selection, property maintenance and rental yield.See the Property Team Page for more information on the acquisition strategy.
Rental Income - Every Brick you own gives you a proportionate share of any monthly net rental income from that property, which we distribute into your BRICKX Account. In the event that rental income does not cover expenses, rent may not be paid.
Monthly rental distributions are calculated as follows:
(strata levies + water rates + council rates + maintenance + management fees + annual audit and valuation fees + property taxes + debt interest + principal repayments + other costs)
These distributions, are calculated on the last calendar day of the month. You must be holding your Bricks at 11:59pm on the last day of the relevant month end for which a distribution is declared to receive distributions.
For details on the Rental income of each property, see the Monthly Distributions tab on each property listing.
Capital returns - You also have the potential to earn capital returns from your Bricks, which you can realise on the sale of your Bricks and/or the sale of the underlying property. The BRICKX Platform makes available property and suburb data, and regular valuation updates, which assists you in tracking the performance of your investment and the ongoing value of your Bricks. For more information see the Capital Returns tab on each property listing.
Capital returns are based on the difference between what you paid for the Brick and what you sell it for (taking into account fees). Capital returns can be either positive or negative depending on the market at the time you choose to sell.
Please note that investing on the BRICKX Platform is not without risk and you may lose some or all of your investment. It is important that you read and understand each of the risks in our PDS.For details on latest Brick Valuation and historical suburb performance of each property, see the Capital Returns tab on each property listing.
BRICKX was the founded in 2014 by Markus Kahlbetzer, the CEO of BridgeLane Group. Markus has 10 years’ experience investing in technology, agriculture, real estate and equity markets. He is CEO of the BridgeLane Group, a diversified investment group formed in Sydney in 2009. Markus is passionate about progressing Australia’s technology innovation industry and has co-founded Tank Stream Labs, a co-working/entrepreneurial business community, and Tank Stream Ventures, an investment fund focused on early stage tech startups.
BRICKX is managed and operated by the CEO Anthony Millet, Anthony has over 12 years’ professional experience across e-Commerce, technology and investment banking industries. With a passion for property and technology, Anthony has extensive experience working in innovative environments, advising and leading teams, and companies, through rapid growth. Formerly, Director & Chief Operating Officer of ActivInstinct.com, Anthony was responsible for building one of Europe’s largest e-Commerce businesses. Prior to this, Anthony was an Associate Director at UBS Investment Bank, London, focusing on Technology and Business Services transactions.BRICKX has partnered with Theta Asset Management Limited (Theta), as the ‘Responsible Entity’ of the BRICKX Platform. Theta holds an Australian financial services licence (AFSL No. 230920), which authorises it to (among other things) operate the BRICKX Platform provide general advice in relation to, and deal in, securities and interests in managed investment schemes. Theta, as Responsible Entity for the BRICKX Platform and trustee of each BRICKX Trust, is responsible for all compliance and regulatory aspects of operating the BRICKX Platform. Theta has appointed BRICKX as Manager of the BRICKX Platform.
The BRICKX Platform is a property investment platform open to all Australians. The BRICKX Platform is designed to provide easy investment access to the residential property market, empowering you to choose the property and investment that suits your financial needs.
Investors may include:
- First time property investors;
- Existing property investors;
- Self-Managed Super Funds (SMSF);
- Property Syndicates; and
- Retirees with long-term investment time frames.
At present, BRICKX is authorised to provide our property investment platform to Australian residents only, and you must be 18 years or older.The advice provided in relation to the BRICKX Platform, including on the BRICKX Platform website, is general advice only and has been prepared without taking into account your objectives, financial situation and needs. Before making any decision in relation to BRICKX or any products offered by BRICKX you should read the Product Disclosure Statement (PDS) and consider whether they are right for you.
Yes, self-managed superannuation funds (SMSFs) can invest with the BRICKX Platform. Once you have registered as an Individual, we provide you with the opportunity to complete the SMSF application form that is available in your Account. The form requires details regarding structure, beneficial owners and more to ensure that we comply with our AML/CTF obligations in providing the BRICKX property investments to SMSFs.
To invest on the BRICKX Platform with your SMSF, please complete the necessary SMSF Application process here.Contact us at firstname.lastname@example.org or (02) 8766 0566 for assistance.
Unfortunately not. BRICKX is only available to Australian residents 18 years and over.
BRICKX has a simple fee structure
BRICKX charges a 1.75% transaction fee when you buy or sell your Bricks.In addition, as part of an individual property’s expenses, a 6%+GST property management fee is deducted from the Gross Rental Income of each BRICKX Trust (before making distributions to Brick Holders, if any), and $75 per property per month fee (equating to $0.0075 per Brick per month) to cover annual audit and valuation services. See “How are distribution calculated and paid?” question.
My BRICKX Account
Setting up your BRICKX Platform Account is easy.
- First you need to sign up and verify your email.
- You will them be asked to accept the PDS and the Terms and Conditions of the BRICKX Platform.
- At this point you will now have access to your BRICKX Account
To get started, you can sign up here www.brickx.com/signup.
Once your Account is set up, you need to become a Member of the scheme, so that you can buy Bricks.
- You will first need to pass an identity check. This is required to satisfy the AML/CTF requirements, and includes the collection of your name, date of birth, and residential address. We use an external third party to conduct this service for us.
- You then need to to make a minimum deposit of $75, inclusive of a one-off application fee of $10
- This minimum deposit (including the $10 application fee) is made available in your Wallet to apply towards the purchase of Bricks.
Fund deposits into the BRICKX Platform are made through secure and trusted external third party payment gateways which support every major Australian bank. Note that funds transfers can take between 2 to 3 business days to complete.Once you deposit funds, BRICKX may, at its discretion, advance an amount equal to some or all of such funds into your Wallet (to a maximum value of $5,000) ahead of your funds transfer being complete, for the purpose of allowing you to buy Bricks. During this period, you will only be able to buy (and not sell) Bricks. Once the deposit is cleared and complete, your ability to sell Bricks and the withdrawal of funds will be enabled.
Your Digital Wallet (also referred to as ‘Wallet’ on the Platform) is an arrangement between you and BRICKX under which BRICKX holds money you deposit, or receive (either through distributions or the sale of Bricks) on trust for you.
Once you register on the Platform, BRICKX will set up your Wallet.
Fund transfers into your Wallet are made via external third party payment gateways that support every major Australian bank. The transfers can take between 2-3 business days to complete. Once you deposit funds, BRICKX may, at its discretion, advance an amount equal to some or all of the funds deposited to your Wallet (to a maximum value of $5,000) ahead of the funds transfer being completed, for the purpose of allowing you to buy Bricks. During this period, you will only be able to buy (and not sell) Bricks. Once the deposit is cleared and complete, your ability to sell Bricks and withdraw funds will be enabled.
In order to buy Bricks and receive the proceeds from the sale and/or distributions from Bricks you must have a BRICKX Account and a Wallet. When buying or selling Bricks your Wallet will be debited or credited (as applicable) with all funds required to settle the transaction.You can withdraw money from your Wallet into your nominated personal bank account by logging into your BRICKX Account.
The security of your BRICKX Account is of the highest importance to us.
Managing My Account
As a BRICKX Member you can log in and view the details of your BRICKX Account, Wallet and any Brick Holdings you may have.
The reports described below are also available for download and printing:
BRICKX and Transaction Confirmation Statement - this details all the Bricks you have purchased and/or sold on an individual transaction basis.
Annual Statement - provides details of your investment in the BRICKX Platform (including Brick holdings) as at 30 June each year.
An Annual Report - financial report for the BRICKX Platform for each financial year ending 30 June.
Annual Tax/Distribution Statement - for the financial year ending 30 June, will be available within 3 months post financial year end to assist you in preparing your income tax returns.
Annual Depreciation Statement - provides all the details of your depreciation allowance in relation to Bricks held during the financial year (ending 30 June).All your investment and financial reports will be held in the ‘My Documents’ section of your BRICKX Account.
Account details and settings can be updated by logging into the Settings section within your BRICKX Account. Within this section you are able to enter and/or update your TFN, nominated bank account, marketing preferences, deactivate your Account, and change your Account password.If you need any assistance in updating your personal details, please do not hesitate to Contact Us here.
Before you can deactivate your BRICKX Account, you need to sell all of your Bricks, and withdraw all of your funds from your Wallet. Once your BRICKX Account is empty you can deactivate it yourself by checking the ‘Deactivate’ box in your Settings section or you can Contact Us for assistance.Once your BRICKX Account is deactivated, you are no longer a Member and will need to reapply in order to participate in the BRICKX Platform.
Brick Prices and Valuations
The Brick Price is the price at which buyers buy, and sellers sell, Bricks.
The Initial Brick Price of a new property on the Platform is calculated at the commencement of the Pre-Order phase, as laid out below. See “What is the Pre-Order phase?” question.
Initial Brick Price =
Once the Pre-order phase is complete (at Settlement Date), the ongoing Brick Price is set by the seller. To inform the sale price set by the seller, BRICKX publishes independent semi-annual valuations and relevant industry data on the Platform. It should be noted that Sell Orders will not be accepted at a price that is more than 20% lower than the latest current Brick Valuation.
The ongoing Brick Valuation is calculated as follows:
Brick Valuation =
*All acquisition related costs (including stamp duty and other fees) are amortised regularly over a 5 year period. This is reflected in the regular Brick Valuation updates. “Other fees” can include legal fees, buyers’ agent fees, trust establishment and other costs. The calculation of the Initial Brick Price also includes a contribution to the relevant BRICKX Trust’s Cash Reserve. See question: ‘What are the property acquisition costs and the Cash Reserve?’ for more information.
The Initial Brick Price for a new property on the Platform is calculated at the commencement of the Pre-Order phase, in accordance with the formula below. See “What is the Pre-Order phase?” question.
Initial Brick Price =
Once the Pre-Order phase is complete (at Settlement Date), the ongoing Brick Price is set by the seller, determined by Brick supply and demand. It should be noted that Sell Orders will not be accepted at a price that is more than 20% lower than the latest monthly current Brick value.BRICKX provides information including independent property valuations and historic performance for the seller to consider in setting the Brick sale price. In addition, other macro-economic factors, and the underlying performance of the property market may also need to be taken into consideration. However, ultimately it is the supply of and demand for Bricks that will determine the Brick sale price.
BRICKX arranges for semi-annual independent valuations to provide you with an independent view on Brick Valuation. In addition, BRICKX provides updated industry data for you to consider when setting your proposed Brick sale price.
The regular Brick Valuation is calculated as follows:
Brick Valuation =
For details on the latest valuation of an individual property, and the calculation to Brick Valuation, see the Capital Returns tab on each property listing.
To buy Bricks, you must first register to become a BRICKX Member through the online registration process. As part of the registration process you are required to deposit a minimum of $75, inclusive of a $10 application fee. The minimum deposit will be made available in your Wallet to be applied towards buying your first Bricks.
There are two ways you can purchase Bricks.
- Selecting available Bricks through the Properties page - Once you’ve logged into your BRICKX Account, you can go to the property pages to view details including market data, property information, and the number and prices of available Bricks.
When you are ready to invest you simply hit the Buy Bricks button and choose the number of Bricks you want to buy against what is available. You will always be buying the lowest priced Bricks available.
When you confirm your purchase you will receive an email confirming your Brick purchase transaction! All transactional details can be seen in the Transaction History section of your BRICKX Account.
- At Pre-Order Phase - You are able to reserve Bricks in properties at the Pre-Order Phase at the Initial Brick Price. These reserved Bricks can be cancelled at any time up until the Settlement Date, which will be detailed on the individual property page.
New property listings will be shared with investors via email, who will then have the ability to reserve Bricks in that property at the determined Initial Brick Price.
You must have the required funds in your BRICKX Account in order to reserve Bricks at the Pre-Order Phase. Any reserved Brick orders can be viewed in the Pending Orders section in your Account, and the funds required to purchase these Bricks will be held in reserve in your Wallet until the Settlement Date of that property occurs. At Settlement Date your reserved Bricks will transact a Brick purchase, with an email confirmation being sent.Please note: Post exchange date, should the BRICKX team become aware of any information that adversely affects the agreed purchase value, BRICKX may cancel the listing. Should this happen all reserved Bricks will be cancelled accordingly, and reserved funds will be released to back to your Wallet.
An initial minimum deposit of $75, inclusive of a $10 application fee, is required to activate your BRICKX Account. An amount equal to your initial deposit (inclusive of application fee) is made available in your Wallet to be applied towards the purchase of Bricks.Note the minimum investment in Bricks is the minimum price of a single Brick.
There is no minimum investment period in relation to holding Bricks. You can buy and offer to sell Bricks at any time. In the event that BRICKX advances you funds as part of the deposit process, you will be unable to sell any Bricks until the deposited funds are cleared. See How do I deposit money into my BRICKX Account?On the 5th anniversary of a property’s Settlement Date, and every 5 years after, BRICKX will co-ordinate a vote amongst the Brick Holders of that BRICKX Trust to determine if the Brick Holders wish to sell or maintain the property on the Platform. See question: ‘When is a BRICKX property sold?’ for more information.
The Pre-Order phase is the stage or period of time between a new property being added to the BRICKX Platform and that property’s Settlement Date. During the Pre-Order Phase, if you have sufficient funds in your Wallet, you have the ability to reserve Bricks in a new property listing at the determined Initial Brick Price (see question “How do I reserve Bricks on new properties?” for more information). Bricks are reserved on a first come first served basis, and there are only ever 10,000 Bricks available in each property listing.
When the funds required for the Pre-Ordered Bricks are reserved in your Wallet, you are unable to withdraw those funds or use them to acquire or reserve other Bricks, unless the Pre-Order transaction is cancelled. Pre-Orders can be cancelled at any time up until the Settlement Date. Prior to Settlement, should BRICKX become aware of any information that adversely affects the agreed purchase value, BRICKX may cancel the listing, and all reserved Bricks will be cancelled accordingly, with reserved funds released to your Wallet.
The Initial Brick Holder will hold all 10,000 Bricks on issue.At the Settlement Date, reserved Bricks will be acquired from the Initial Brick Holder. If, after the Pre-Order phase completes the Initial Brick Holder is still holding Bricks, the Initial Brick Holder can sell those Bricks on the Platform in the same way as any other Brick Holder.
New property listings will be communicated via email to all Members, who will then have the opportunity to reserve Bricks in that property at the determined Initial Brick Price.
You can reserve Bricks in properties during the Pre-Order Phase at the calculated Initial Brick Price. To reserve Bricks, go to the Summary tab of the individual property listing, and select the Reserve Bricks button, and select the number of Bricks you wish to reserve.
To reserve Bricks, you will need to have sufficient funds in your Wallet.
Any reserved Brick orders can be found in the Pending Orders section of your Account, and the funds required to purchase these Bricks will be held in reserve in your Wallet until the Settlement of that property occurs or until you cancel the order. At Settlement Date, your reserved Bricks will transact to a Brick purchase, with an email confirmation being sent.
Please note: Post exchange date, if the BRICKX team becomes aware of any information that adversely affects the agreed purchase value, BRICKX may cancel the listing. Should this happen all reserved Bricks will be cancelled accordingly, and reserved funds will be released back to your Wallet.See question: What is the Pre-Order Phase? for more information.
For full terms, click here.
(strata levies + water rates + council rates + maintenance + management fees + annual audit and valuation fees + property taxes + debt interest + principal repayments + other costs)
These distributions, in line with net rent collections, are calculated on the last calendar day of the month. You must be holding your Bricks at month end to receive distributions.
Each tenanted BRICKX property receives rent from the tenant of the property based on a commercial market rental rates, which is generally paid by the tenant monthly in advance to the corresponding BRICKX Trust.
The following amounts will be deducted from Gross Rental Income prior to making any distributions:
- all expenses relating to the maintenance of the property;
- such amount as is required to replenish a drawn down cash reserve; and
- a monthly charge of $0.0075 per Brick (or $0.09 per year) to be applied towards annual audit and valuation fees of the relevant BRICKX Trust.
BRICKX adopts a policy of “distribution smoothing” to streamline the amounts paid and reduce distribution peaks and troughs. The distribution smoothing policy distributes funds based on expected income and predictable expenses, with the aim of providing a consistent and more predictable level of distribution payments each month.
The net rental income* is distributed to your Wallet generally within 10 business days of month end. BRICKX will send an email to inform you once the monthly rental income has been distributed. Specific information on predicted distributions and expenses, as well as historic distributions can be found on the Monthly Distributions tab within each property listing.*In the event that the monthly rental income is less than the expenses of a particular month, there may be no distributions for that month. This may happen during vacant periods, in the situation of tenant default or when significant unexpected maintenance and repairs occur.
The value of a property on the BRICKX Platform may increase or decrease based on a number of factors including independent property valuations, general market performance and economic conditions. These factors may or may not impact the price at which you are willing to buy and sell Bricks.You will benefit from capital growth if the sale price of your Bricks is greater than the purchase price of your Bricks, after taking into account transaction fees. Equally, you will make a capital loss if the sale price of your Bricks is less than the purchase price of your Bricks.
BRICKX will send you an email to notify you that rental income has been distributed. Specific information on predicted distributions and expenses, as well as historic distributions can be found on the Monthly Distributions tab within each property listing.In addition, you will be informed of any updates to property valuations and Brick Valuation, along with selected industry data through the above mentioned monthly email, with the same information published on the corresponding property listings.
As part of a property acquisition, each property has a depreciation and capital works deductions report produced. Properties and associated depreciable assets are subject to capital works deductions and depreciation respectively, in accordance with ATO (Australian Tax Office) guidelines.
In addition, any capital items which are subsequently purchased, depreciate over the relevant time period.All depreciation / capital works allowances attributed to Bricks held at each month end are taken into account in working out the tax composition of any distributions received in respect of each Brick. These allowances are reported in your annual tax statement.
You can sell your Bricks by listing them for sale in the Order Book. To do this, you must place a Sell Order into the Order Book for the relevant property (click Sell Bricks on the corresponding property listing page), specifying the number of Bricks you wish to sell and the sale price per Brick. You can only sell Bricks that you own. The sale price you set must not be less than 20% lower of the latest current Brick Valuation.
To assist you in setting your sale price the regular Brick Valuations, property related documents and industry data are available for you to consider.
A sale occurs when there is a willing buyer who agrees to purchase your Bricks at the price you have set. You can cancel a Sell Order at any time before it is matched with a corresponding purchase by going to the Pending Sell Orders section within your Account. The proceeds on a completed sale of Bricks will be distributed into your Wallet , less any transaction fees.
You can only sell Bricks when there is a buyer willing to purchase your Bricks at the price you set, or when your fellow Brick Holders in a particular BRICKX property collectively agree to exit the investment by deciding to sell the relevant property. See question When is a BRICKX property sold?, for more information.Where BRICKX has advanced you funds while you wait for deposited funds to clear, you will only have the ability to buy (and not sell) Bricks. Once your funds clear, your ability to sell Bricks will be enabled.
There must be a buyer for a sale to be executed. If there is no one to buy your Bricks, your Bricks cannot be sold.To provide further exit opportunities to Brick Holders, BRICKX arranges a vote amongst the Brick Holders of a particular BRICKX property on the 5th anniversary of that property’s Settlement Date on the Platform, and each 5 years thereafter, to determine if the Brick Holders wish to sell or maintain the property on the platform. Should over 50% of the Brick Holders in that property agree to the sale of the property it will be put up for sale. In addition, Brick Holders may at any time collectively agree to sell a property and end the investment period of a particular BRICKX property.
All our property acquisitions are based on, in BRICKX’s opinion, their potential to provide positive rental income and capital returns, with the intention of securing you balanced and varied investment opportunities. The properties listed on the BRICKX Platform are selected on the basis of meeting investment criteria with a view to optimising rental and capital returns.
In selecting properties, we focus on:
Property characteristics – distinguishing features that add value and robust construction that will provide solid investment longevity and minimum upkeep funding. We seek to avoid properties that have facilities (such as a pool) which might add to the running costs and may reduce net income.
Suburb capital growth and yield returns- positive historical performance and continued growth expectations are the basis of this criteria. This might include considerations around employment forecasts and the levels of migration into Australian capital cities, helping us form a view on which cities to focus on, and the right suburbs within them to invest in.
Independent Valuations- these are provided by external parties to validate the investment case.
Our Acquisition Strategy- the Property Team reviews the immediate and ongoing needs of the BRICKX property portfolio on a quarterly basis, to formulate a strategy to respond effectively to the market, and meet the ongoing needs of the BRICKX community.
The Property Team- BRICKXs’ Property Team is drawn from a cross section of professional experience in the property and investment sectors. It consists of three core teams; the BRICKX Property Team, whose purpose it is to seek out investment opportunities, the BRICKX Investment Team, who bring years of investment experience into the mix, and The Adviser Panel who are accomplished property market analysts.Our approach to choosing properties may change over time, but overall we seek properties which are, in BRICKX’s view, high quality and preferably those in blue-chip suburbs.
There are costs involved in completing a property purchase, which may include, stamp duty, legal fees, buyers agents fees, trust establishment fees etc. The fees incurred with any property purchase on the BRICKX Platform are included in calculating the Initial Brick Price (see What is the price of a Brick? question) All acquisition related costs (including stamp duty and other fees) are amortised regularly over a 5 year period which is reflected in the regular Brick Valuation updates.Cash Reserve
The calculation of the Initial Brick Price also includes a contribution to the relevant BRICKX Trust’s Cash Reserve. Each BRICKX Trust maintains a Cash Reserve that is approximately 3 months’ worth of expenses payable in relation to the property. It is not anticipated that this Cash Reserve will exceed 3% of the initial value of a BRICKX Trust’s assets.
The primary purpose of the Cash Reserve is to cover necessary and ordinary expenses (for example, repair and maintenance) arising during a short term vacancy in the property.
In addition, the Cash Reserve may be used to pay expenses where billed services extend over a one month period, with replenishment of the Cash Reserve drawn proportionately from gross income in future months.
If the Cash Reserve is drawn down, the rental income will first be applied to replenish the relevant BRICKX Trust’s Cash Reserve, which will therefore reduce the net income of the trust and the distributions payable to Brick Holders of that trust for that period.The Cash Reserve is not a guarantee that you will not make a loss on your investment and it is not a risk management product held by the relevant BRICKX Trust for your benefit.
The BRICKX Platform enables property investment without many of the traditional hassles of property management. BRICKX considers effective property management key to the overall success of the investment asset.The Property Management Team is responsible for all day-to-day property management functions typically undertaken by a property manager of a rental property including:
- sourcing tenants and determining rent;
- creating and managing leasing arrangements;
- rental collection;
- undertaking periodic inspections of each property
- providing written reports relating to the state of the property and items requiring attention; and
- co-ordinating repairs or maintenance
Brick Holders do not take an active part in managing the properties and will not be consulted for any day-to-day decisions relating to any property.The cost of ongoing property management is 6%+GST of Gross Rental Income, which is deducted from Gross Rental Income on a monthly basis, ahead of payment of any distributions.
The BRICKX valuation policy is designed to ensure that all properties on the Platform are valued at regular intervals in accordance with the Corporations Act.Independent semi-annual valuations are performed by external qualified valuers, which are subsequently published on relevant property pages. The latest Brick Valuation is also updated at this time.
While we endeavour to keep all of our properties tenanted while listed on the Platform, as with any rental property, there may be periods where a property is not tenanted. During these vacant periods, it is possible that rental income will be affected, which may result in reduced or no distributions for this period.In the event that the property is vacant for an extended period of time, property expenses will continue to be paid from the Cash Reserve (see the “What are the Property Acquisition Costs and the Cash Reserve?” question). Where it is looking unlikely that the property will be tenanted, the property may be sold. (see the “When is a BRICKX property sold? question).
BRICKX facilitates a meeting of Brick Holders of a particular BRICKX property on the 5th anniversary of that property’s Settlement Date, and each 5 years after, to give Brick Holders the opportunity to choose to sell the property. Should Brick Holders representing over 50% of the Bricks in that property agree to the sale of the property it will be put up for sale. In addition, Brick Holders may at any time collectively agree to sell a property.
In addition where a BRICKX property’s expenses cannot be funded from the gross income of the property or issue of additional Bricks, and the Cash Reserve and short-term loan (if any) have been exhausted, the BRICKX property may be sold to settle the property’s debts.As with any other sell transaction on the platform, where a BRICKX property is sold there is a 1.75% transaction fee deducted from the proceeds.
Debt & Gearing
Gearing refers to a mortgage or debt finance applied to assist with the purchase of a property. If a property has gearing, details of the amount of debt, interest rate and term of loan can be found on the Capital Returns tab on an individual property listing and in the PDS.As with any mortgage, the debt secured against properties attracts monthly interest repayments. These interest repayments are deducted from the Gross Rental Income of a property, ahead of any rental distributions to Brick Holders.
A property's Brick Price is determined by dividing the equity component of the corresponding BRICKX Trust into 10,000. For example, if the total acquisition cost of a BRICKX Trust (including property, Acquisition Costs and Cash Reserve) on the BRICKX Platform is $1M, and we borrowed $300,000, then the equity remaining in the BRICKX trust is $700,000*. This would initially create a $70 Brick Price (rather than a $100 Brick Price if there was no debt finance).*This assumes acquisitions costs are considered equity. These are amortised equally over a 5 year period. For more details, see “What are the property acquisition costs and the Cash Reserve?” question.
Gearing a property on the BRICKX Platform amplifies the impact of the Brick Valuation movements. Gearing, may therefore increase the potential investment returns and investment risk associated with investing in that property.
Using a simple example, where a BRICKX Trust is valued at $1m (assume $950,000 property value, $40,000 of costs and $10,000 Cash Reserve). If the property value rose by 10%, the subsequent trust value would be $1,095,000 or an uplift of 9.5% (note that only the property rises 10% and not the full value of the trust, as costs and cash don’t rise). If the same property was funded with a $300,000 mortgage, then the initial equity value of the trust would be $700,000. The subsequent 10% rise in property value, would give a resultant equity value in the trust of $795,000 which equates to a 13.57% uplift in equity value ($95,000/$700,000).Note this is a very simplistic example designed to demonstrate the effects of gearing, and does not take into account other factors and costs which might affect an individual property valuation.
Details of each mortgage can be found on the Capital Returns tab of each property listing and in the PDS. BRICKX currently holds Interest Only mortgages, which means no principal repayment is required at this stage. The interest repayments are deducted and paid from the Gross Rental Income from the property, and therefore it is expected that the geared property will provide a positive cashflow through rental distributions. Depending on the percentage of debt financing, investors will receive lower distributions on geared properties than they would otherwise expect to receive from the property should it not be geared.For example, on a property with gearing, if a property receives $3,000 per month in rent and the debt repayment is $1,000 a month, then this amount will be deducted from Gross Rental Income ahead of any distribution. If the same property had no gearing, then this $1,000 would be distributed to Brick holders.
Whilst the BRICKX Platform has many benefits, there are also a number of risks associated with investing in the Platform which may lead you to lose all or some of your investment. It is important that you understand the risks before you invest.
The value of your Bricks can go up as well as down due to a number of reasons such as:
- general market risks
- economic risks
- property market risks
- property valuations
- tenant risk
- re-leasing and vacancy
- disaster and insurance risk
- counterparty risk
- lack of liquidity
- gearing risk
- limited operating history risk
- reliance on platform technology
- legal and regulatory risk
Additional risks may exist other than those identified which should be considered in light of your personal circumstances. If you have any queries or uncertainties, please consult your financial advisor before deciding whether to invest or increase your investment.Please refer to our PDS for further details of some of the risks to consider when deciding whether to invest in the BRICKX Platform.
The BRICKX Platform is a managed investment scheme that is registered with ASIC and subject to associated regulatory requirements and oversight.Theta, as Responsible Entity for the BRICKX Platform and trustee of each BRICKX Trust, is responsible for all compliance and regulatory aspects of operating the BRICKX Platform. BRICKX has been appointed as the Manager of the BRICKX Platform and is responsible for managing the platform.
The BRICKX Platform is not an exchange for residential property, and it is not a securities exchange for interests in residential property. It is a registered managed investment scheme which allows Investors to acquire units (Bricks) in various trusts which are indirect (or beneficial) interests in real property. Investors are able to purchase Bricks on the Platform (where available) and list their Bricks for sale (which may or may not be purchased by another Investor).
Each BRICKX property is held in a separate trust by an external Trustee (Theta) and independent Custodian (AET) and BRICKX Trusco as sub-custodian. Theta (the Responsible Entity and Trustee) has appointed BRICKX as Manager of the BRICKX Platform. BRICKX does not hold any of the properties. BRICKX is an authorised representative of the Responsible Entity (authorised representative number (001000043) for the purposes of providing general financial product advice and dealing services in relation to securities and interests in managed investment schemes. BRICKX is the owner of the technology and website behind the BRICKX Platform.
In the event that BRICKX’s business was to fail, or cease, Theta would seek to appoint another manager of the scheme, or wind the scheme up (which would result in the selling of individual properties and returning of funds after costs).For more information on the structure of the scheme, please refer to the PDS.
Theta Asset Management Limited (Theta), is the Responsible Entity for the BRICKX Platform. The Responsible Entity holds an AFSL (AFSL No. 230920), which authorises it to act as the Responsible Entity of the BRICKX Platform, with responsibility for all compliance and regulatory aspects of operating the BRICKX Platform.
Theta has appointed an independent Custodian, Australian Executor Trustees Limited (AET) (ABN 84 007 869 794). AET has appointed BRICKX Trusco as its sub-custodian to hold the properties.Theta has appointed BRICKX as Manager of the BRICKX Platform. BRICKX is an authorised representative of the Responsible Entity (authorised representative number ) for the purposes of providing general financial product advice and dealing services in relation to securities and interests managed investment schemes. BRICKX is the owner of the technology and website behind the BRICKX Platform.
We do not provide any personal advice in relation to any investment in the BRICKX Platform.
Any information we provide to you relating to the BRICKX Platform has been prepared without consideration of your personal investment objectives, financial circumstances or needs.
You should give careful consideration to the risk factors outlined in the PDS prior to investing in the BRICKX Platform having regard to your personal circumstances.If you have any queries or uncertainties, please consult your advisor before deciding whether to invest.
No, it will not. Investors are able to get exposure to residential property by buying Bricks, which are financial products and not a direct interest in real property.