In the last 12 months, BRICKX has grown from offering just four properties to 14 across three capital cities and have nearly 7,000 investors throughout Australia. Many investors are relishing the model because it’s the only way they can get a toehold in the booming property market with “Bricks” from less than $100. We catch up with the BRICKX CEO, Anthony Millet to find out a bit more about the people who are choosing to invest in this way.
Kevin: Several months ago, I interviewed the CEO for BRICKX. I told you about that company. Well, here we are 12 months down the track. They are still going. Not only are they still going, but they’re absolutely booming. Anthony Millet joins me. He is the CEO for BRICKX.
Congratulations. Happy birthday, too, Anthony, by the way.
Anthony: Thanks very much, Kevin. It’s great to be back.
Kevin: Twelve months. A fascinating model. Just walk me through again how the model actually works and how people can become involved in it.
Anthony: The BRICKX website is available to everyone. They can go online, sign up very easily, and they can invest in residential real estate – currently in Sydney, Melbourne, and Adelaide – for under $100. The average portfolio is $2200, so they’re a lot bigger than that, but you can get in for under $100.
The way it works is our expert buying team finds existing properties in highly desirable locations within Sydney, Melbourne, and Adelaide at the moment. We put them into an individual trust, so one property per trust, which is split into 10,000 units, or bricks, as we call them. Investors can then buy anything from one up to 500 bricks, or 5% of the property.
All the properties are rented out, and when the rental income comes in, the professional property managers pay the water, the council, the strata, and all the other expenses, etc. The rental income that remains is then distributed amongst all of the brick-holders on a monthly basis. So every month, every brick-holder will get their share of the rental income.
In addition, investors can make money from the capital growth of the property, and as the property changes in value, we update that brick price, which shows you the uplift – or if the property goes down in value, it could be a downward fall in the value of the property.
What’s also quite unique on our platform is the ability for an investor to be able to put their bricks up for sale at any time they want. So, you’re not investing on anyone else’s time horizon. You put up your brick when you want, when it suits you.
Kevin: The properties, you mentioned there you have an expert group who actually seek these properties out. How successful has that been? In other words, what is the percentage of properties that have improved as opposed to those that have fallen back?
Anthony: We haven’t had anything that’s fallen back yet. We’re invested in Sydney and Melbourne mostly, so we’ve been in some pretty strong markets there. The best performing asset that we’ve had over the last 12 months was a house in Annandale in Sydney that is up 22% since a year ago. And we’ve been pretty successful at being able to acquire assets.
The great thing about our property team is that we’re focused on value assets and we’re not emotional buyers, so we’re generally not going to auctions because we never win at auction. We’re looking for those properties where we can get a really good deal that represents what we think is good fair market value for our investors.
Kevin: Anthony, what have you learned about the profile of your average investor?
Anthony: We have those at the age of 18 to 30 who are entering the property market for the first time – some just dabbling, others saving their housing deposit in line with the market – to those over 35 and upwards who are generally using this as a diversification strategy, now able to invest some of their savings in high-quality residential real estate alongside shares and cash, etc., whereas they may have been excluded from buying this asset class before.
Kevin: Of those people who have decided to sell for whatever reason, has that been a difficult process? How does that actually happen?
Anthony: One of the key benefits of the BRICKX platform is the ability to be able to put your bricks up for sale at a time that you choose – and also at a price that you choose. That mechanism and that process has worked really well since we launched.
We’ve had about 25% turnover of the investments on the platform, and that has been across a median time of 12 hours. So, it’s taken a median time of 12 hours for someone to be able to sell their position in residential real estate, which is obviously a lot quicker than it would take you to sell an entire home.
Kevin: It’s a bit like having a share portfolio in a way, isn’t it?
Anthony: It’s similar, but you’re building a portfolio of units within individual different properties. We find that in terms of the ease of the process, people are able to access the website via any kind of device and it’s very easy to buy and sell bricks.