Selling Social Impact: When Real Estate Meets Social Enterprise
Ethical investing is a key and growing concern for many people around the country. It’s an issue for several small-scale property investors and 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 have 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 profits are directed to 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.
According to Ashleigh Williams, Business Manager of Key2 Realty in Gosford NSW, there is little understanding of ethical investment property opportunities for landlords. “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,” said Williams. “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 property investors and developers long-term leases. 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. Listed below are some of the leading social enterprise real estate agencies operating in property markets around the country:
Purpose Real Estate – QLD, Sunshine Coast: www.purposerealestate.com.au
Elevate Residential – QLD, Brisbane: www.elevateresidential.com.au
Key2 Realty – NSW, Newcastle / Central Coast: www.key2realty.com.au
Echo Realty – NSW, Sydney: www.echorealty.com.au
Homeground Real Estate – VIC, Melbourne: www.homegroundrealestate.com.au