Why Do We Pay IPDC?

Interest Paid During Construction (IPDC) is one of the exclusive benefits available to GPFG investors. We offer this on investments with our Premium Partner developments, with our clients earning a guaranteed 8% return during the construction phase.

“There are a few reasons why we pay IPDC, but the main reason is we are giving positive cash flow to our investors from Day One,” says Mark Reed, GPFG International Sales Manager.

The concept of IPDC has emerged as a game-changer for our clients. At the moment, Australian property investors are seeing an average of 3.5% rental yield, or even 6% if they are lucky. By offering interest payments at a guaranteed 8% on the initial investment, IPDC provides a direct, immediate return that is already paying more than investments across Australia. This approach not only boosts cash flow for investors but also offers a tangible benefit that can be felt right away.

IPDC is paid by the developers quarterly, for up to two years during the construction period of the development.

Our decision to pay IPDC is rooted in a commitment to investor satisfaction and success. “We understand that making an investment, especially in off-the-plan properties under construction and in an overseas location, requires a leap of faith,” says Reed. “By offering IPDC, we aim to reward that trust with immediate returns, providing a sense of security and reassurance that their investment is already working for them.”

The Need for Cash Flow

“Cash flow is the lifeblood of any investment,” Mark explains. “In traditional property investments, returns are typically realised upon completion and the subsequent rental or sale of the property. This waiting period can create a cash flow vacuum, placing pressure on investors. IPDC fills this gap, ensuring that investors see a return on their investment from the outset, enhancing their financial flexibility.”

Read more: 7 Reasons Why Cash Flow is Needed Now, More Than Ever

Immediate and Tangible Benefits

The immediate financial return provided by IPDC represents a tangible benefit that is rare in the property investment landscape, and especially for overseas investment. “It’s about providing value to our investors from the moment they commit to an investment with us,” Mark emphasises.

This upfront return can be particularly satisfying for some of our clients who are in need of cash flow to offset initial costs, or pay down debts, cover the bills of inflation, or even contribute to funding further investment opportunities.

Guaranteed 8% is a better investment than most options in Australia

In today’s Australian property market, where rental yields are dwindling amidst rising living costs and property investors’ portfolios are negatively geared, a guaranteed 8% return on investment significantly outshines typical options.

“Not only are we seeing more investors who are looking for positive cash flow, but 40% of our clients are using their SMSF to purchase with us. The 8% directly enhances retirement savings with stable, above-market returns for up to two years,” says Mark.

Shifting to Operational Returns

After construction ends and the project becomes operational, the focus shifts from IPDC to generating income through rental yields. This transition allows investors to move from a steady, guaranteed interest phase to a phase where returns are likely to increase. We have chosen developments in popular tourist areas with highly experienced operators and property managers, with returns between 15-20% annually.

“This is another reason why we are extremely selective when we bring on developers and projects. Not only do they need to commit to paying investors during their construction phase, but we are fully confident that these projects will deliver above average returns once operational and in the long run,” says Mark.

Guaranteed 8% IDPC returns with GPFG

By providing IPDC, we stand by our investors, offering them a smoother, more rewarding investment journey. “In a world where cash flow is king, IPDC reigns supreme, offering an immediate and tangible benefit that sets the foundation for a successful investment,” says Mark.

For investors looking for a way to maximise their returns and minimise the wait, IPDC offers a compelling solution, backed by the expertise and investor-first approach of our team.

Want to learn more about IPDC and our partner developments? Book a call with our team today!

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