Transcendent Real Estate Limited (TRE) does not remove any of the risks that you may experience should you acquire a commercial or residential property directly and outright (i.e. without a mortgage). Some additional risks are introduced by virtue of the fact that you lack control over day-to-day decisions and timing of your exit.
We encourage you to diversify your TRE investments across multiple properties to safeguard against excessive exposure to any one property that could incur issues such as tenant default or a problem specific to that property that impacts valuation.
Key risks are summarised below.
The value of your Transcendent Real Estate investment can go down as well as up and historic performance is not a guide to future performance. A fall in the value of your investment may be due to a number of reasons, such as a fall in the underlying value of the property or a problem with the property that will need to be funded from future rental income.
You will be required to hold the investment for a minimum holding period commonly between 2-5 years or as specified in the property details pages of that property's listing on the TRE platform. Even at this point, the timing and ability to exit will depend on completion of a transaction to sell the underlying property. This transaction could take several months after the minimum holding period.
Whilst TRE provides gross rental income estimates based on information from third parties, these are not guaranteed. It may be that lower rents are secured. Furthermore, rental income could cease completely for certain periods. For example if a fire were to occur which was not covered by insurance, TRE reserves the right to obtain a loan secured against the underlying property to rectify the damage. This loan will need to be paid down by future rental income.
TRE reserves the right to dispose of the property and return net proceeds to investors. This right is intended to cover unforeseen scenarios. As well as being likely to receive back substantially less than invested, the timing may be unwelcome and may result in the crystallisation of taxable income sooner than anticipated.
In the event that the business plan does not meet its objectives then this could impact the returns offered along with the disposal strategy for the asset.