Ethical investing with a social enterprise real estate
Ethical investing is a key and growing concern for many people around the country. It’s an issue for a number of small-scale property investors, as well as build-to-rent developers with a social conscience.
There is an opportunity for investors to rent their property out and make a positive difference to the community at the same time. Enter, the social enterprise real estate agency. They operate like any others on the market, except that they tend to be owned and operated by not-for-profit community housing providers and therefore distribute profits back into their charitable parent entities.
Over the past 10-15 years, significant interest and growth in ethical investments has focussed on super funds and other direct investment options in shares and managed funds. Investors who owned property had limited opportunities to use that asset similarly - until the rise of the social enterprise real estate agents.
How does it work and what is the catch?
There is little reason why an investment property owner wouldn’t choose a social enterprise real estate agency. Fees are very competitive, and the services on offer are the same as any agency. Because they operate as social enterprises, the key difference is that their profits are used for charitable purposes. In most cases, this is through their Community Housing Provider parent companies who may develop purpose-built affordable housing or offer tenant support programs.
Ashleigh Williams, Business Manager of Key2 Realty in Gosford, said there is little understanding of ethical investment property opportunities on the Central Coast.
“At Key2 Realty, our profits are directed to three charitable programs operated by Pacific Link Housing for those less fortunate, including a learner driver program, education scholarship program and a sports and wellbeing initiative. We have received immense support from investment property owners and grown to manage over 200 properties in less than three years which is a significant achievement”.
Whilst every social enterprise real estate agency is different, most have not delved into sales and focus solely on managing investment properties. They can often bring together organisations that headlease residential properties and offer long-term leases to property investors and developers. These organisations may include disability support services, not-for-profit support agencies and community housing providers. Other offerings for the ethical property investor unique to these agencies include tax breaks such as the Capital Gains Tax (CGT) discount for affordable housing, which can reduce CGT by an extra 10%.
In addition to making a positive difference in the community, there are more ‘win win’ opportunities on offer for investment property owners. Call Key2 Realty today on 4326 5566 to find out how your rental property can work for you and those in need of a helping hand.