Co-ownership Red Flags - 3 Types of Co-ownership
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What are the red flags with co-ownership? You hear a lot of talk about co-ownership lately, and truthfully some aren't actually co-ownership. There are three things that people are calling co-ownership these days.
The first is rent to own - where you have an investor who buys a property, you pay them some deposit, and then typically a higher monthly rent and they apply some of that rent towards the equity in the property. Then at the end of an agreed upon period of time, you have the option to purchase the property and will have built up a down payment. The downside of that is sometimes people can't close after that time, and the investor gets to keep the funds. The real benefit of rent to own is for people that wouldn't be able to get into ownership because of credit situation, for example, are able to get into the property that they want to get into and with the help of investors are able to stay there. So it's not good or bad, it's just a different way of approaching things.
The next thing they're calling co-ownership - but it's not really - is the shareholder model. This is where you and a pool of other investors put money into some type of corporation and they go out and buy real estate. They give you a return on that money and at some point sell the property or rent it to give you an income stream. In that case you're also not on title personally for the property, the corporation is, and you're a shareholder in that corporation. The thing you need to know is they're making money and you're really the seed capital.
The watch out here is actually in both of those models, rent to own, and the shareholder model, is you are not on title right you are not the owner of the property. Even though they're calling it co-ownership, somebody else actually owns it and you're providing equity.
The third one is actual co-ownership where you go on title. You buy a property with other investors or other people that are going to live in the property and you live there with them, or you just invest and rent it out. Either way, you're actually on title and you're getting all the benefits of the property - be it rent, appreciation, etc.
There are lots of ways to get into the real estate market. Truthfully some of these things are good for people for various reasons and situations and circumstances. However, we would say that the thing you really want to get to is having your name on title somewhere in the city of Toronto, because you're going to get the most benefit from that and the most capital appreciation. If you have any questions or if you want to get into co-ownership that's actually something we specialise in. We do a lot of that for our clients and we have investors that are willing to pair with other investors or potential people that want to live in properties.
Connect with us:
https://thinkto.ca/
Instagram: paulhaley_thinkrealestate
Facebook: paulhaleythinkrealestate
LinkedIn: paulhaley-realestate
What are the red flags with co-ownership? You hear a lot of talk about co-ownership lately, and truthfully some aren't actually co-ownership. There are three things that people are calling co-ownership these days.
The first is rent to own - where you have an investor who buys a property, you pay them some deposit, and then typically a higher monthly rent and they apply some of that rent towards the equity in the property. Then at the end of an agreed upon period of time, you have the option to purchase the property and will have built up a down payment. The downside of that is sometimes people can't close after that time, and the investor gets to keep the funds. The real benefit of rent to own is for people that wouldn't be able to get into ownership because of credit situation, for example, are able to get into the property that they want to get into and with the help of investors are able to stay there. So it's not good or bad, it's just a different way of approaching things.
The next thing they're calling co-ownership - but it's not really - is the shareholder model. This is where you and a pool of other investors put money into some type of corporation and they go out and buy real estate. They give you a return on that money and at some point sell the property or rent it to give you an income stream. In that case you're also not on title personally for the property, the corporation is, and you're a shareholder in that corporation. The thing you need to know is they're making money and you're really the seed capital.
The watch out here is actually in both of those models, rent to own, and the shareholder model, is you are not on title right you are not the owner of the property. Even though they're calling it co-ownership, somebody else actually owns it and you're providing equity.
The third one is actual co-ownership where you go on title. You buy a property with other investors or other people that are going to live in the property and you live there with them, or you just invest and rent it out. Either way, you're actually on title and you're getting all the benefits of the property - be it rent, appreciation, etc.
There are lots of ways to get into the real estate market. Truthfully some of these things are good for people for various reasons and situations and circumstances. However, we would say that the thing you really want to get to is having your name on title somewhere in the city of Toronto, because you're going to get the most benefit from that and the most capital appreciation. If you have any questions or if you want to get into co-ownership that's actually something we specialise in. We do a lot of that for our clients and we have investors that are willing to pair with other investors or potential people that want to live in properties.
2 سال پیش
در تاریخ 1400/12/19 منتشر شده
است.
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