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The Benefits of Private Credit Investing in Real Estate

James Storey
James Storey |
The Benefits of Private Credit Investing in Real Estate
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Discover the advantages of real estate private credit investing, a strategy that protects your capital while offering consistent returns.

Real Estate Private Credit 

Real estate private credit has emerged as mainstream investment class over the past few years as changes to banking regulation and capital requirements led to a retreat of traditional lenders creating a funding gap in the market.

As an asset class, real estate private credit offers investors monthly recurring income in the form of interest payments and as the loan investments are secured via a mortgage on the real estate asset, the debt, typically must be repaid in full before any return is made to the owners of the real estate asset.

The Real Estate Capital Stack

Risk is the trade-off for return. Equity investors (across any asset class) theoretically have limitless return, in exchange for greater risk of capital gain or loss. Conversely, debt investors receive a fixed return and their claim on the property asset until fully repaid, ranking ahead of the equity in a property or project. As mentioned above, this is typically secured by mortgage registered on the title of the property.

A Focus on Income and Capital Preservation

1. Your Investment is Secured by Real Estate

Every loan is backed by mortgages on real property. If a borrower defaults, the property can be sold to recover your capital. This built-in security provides a solid safety net.

2. Lenders Get Paid First

As a credit investor, you’re first in line for repayment before property owners (equity investors).

3. Consistent and Predictable Returns

Unlike equity investments that rely on fluctuating property values or rental income, real estate private credit delivers consistent interest payments. This focus on reliable income aligns with the goal of capital preservation and recurring income returns.

4. Proactive Risk Management

Private credit managers, like 360 Capital, work to reduce risks at every step:

  • Ongoing Borrower Screening: Ensuring financial reliability.
  • High-Quality Collateral: Backing loans with well-located, properties secured by mortgages and guarantees from borrowers.
  • Strict Monitoring: Keeping borrowers accountable with covenants and oversight.
How to Get Started with Real Estate Private Credit Investing

Investing in real estate private credit is straightforward. Partner with a specialist like 360 Capital, which focuses on real estate equity and credit investments secured by Australian property.

Understand the strategy by looking for conservative lending practices and high-quality collateral. To learn more about investing in real estate private credit or the 360 Capital Mortgage REIT (ASX:TCF) or 360 Capital Private Credit Fund (PCF), you can contact 360 Capital’s investor relations via investor.relations@360capital.com.au or visit www.360capital.com.au

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