Islamic Investment Finance
Can I Obtain Islamic Investment Finance In Australia?
Islamic investment finance in Australia follows the same principles as Islamic home finance. Most Islamic funders in Australia will fund investment properties or allow you to access equity in your property for other investment purposes. If you have approached another Islamic funder in Australia and were told that they would be unable to help you, we may be able to assist. Our panel of funders have different requirements for the purpose of these investment funds, how much can be financed and the type of property that they would accept as a sound investment. For this reason, we are able to offer our customers more choice as we are able to offer a broad selection of products.
What Investments Can Be Financed?
Investing is not limited to purchasing an investment property. We have negotiated finance for a variety of purposes for our clients. Some of these have included:
- Accessing funds for investment in the share market
- Accessing funds for investments in unit trusts
- Construction of a residential investment property
If you have an investment scenario or a unique situation that you would like to discuss with us further, simply contact us to find out how we can help.
Are There Different Types Of Islamic Investment Finance?
There are multiple types of Islamic investment finance in Australia and these are largely defined by the finance contracts. Below you will find a list of the most common forms of these contracts. Please note that not all are available in Australia.
Ijarah Muntahia Bittamleek (Rent To Buy)
This is a form of rental agreement where a funder will finance an investment property and you will pay agreed rental instalments to the funder. These rental instalments can be either fixed or variable and will occur over an agreed rental period. In addition to paying rent for the portion of the property you do not own, you will also make additional payments to buy back the ownership from the funder. At the end of the rental period, you have the option to buy the property from the funder. The amount the funder sells the property for at the end of the agreement is typically a couple of hundred dollars as your have fulfilled your rental agreement.
Ijarah wa-iqtina (Rent with gift)
This is a form of rental agreement where a funder will finance an asset and you will pay agreed rental instalments to the funder. These rental instalments can be either fixed or variable and will occur over an agreed lease period. The difference between Ijarah Muntahia Bittamleek and Ijarah wa-iqtina is that with the latter, at the time of purchase – the funder signs a separate agreement to ‘gift’ the asset at the end of the rental period rather than to sell it to the client.
Are there other contracts except Ijarah Contracts?
Diminishing Musharakah is a type of finance contract where there is a ‘co-ownership structure’ of the asset. The funder and the borrower jointly purchase an asset together. When this occurs, the funder acts as an investor or entrepreneur and financially backs the client to buy a property. The funder will take a percentage ownership in the property proportionate to the amount that they finance. With this type of agreement, the purchaser will buy back the units of the property that is owner by their investor. By doing this, the funder acts as an investor and jointly owns the asset and slowly sells it back to them over a pre-agreed period.
How Does Sharia Finance Help?
It can be difficult to navigate Islamic investment finance in Australia. At Sharia Finance, our team of Islamic specialists have significant experience helping our clients around Australia to successfully apply for Islamic Investment Finance. Our team support you every step of the way including discussions about different Islamic funders and their contracts, negotiating with the funder on your behalf and managing the application all the way until the funds are paid. If you would like to speak with us about your personal circumstances, simply give us a call or request a call using our online booking platform.
Are You Eligible For Islamic Finance?
Looking to buy or refinance? Take our short quiz to see if you are eligible to apply for Islamic finance
A friendly member from our team will contact you to answer your questions about islamic finance