Developers Rent-to-Own Explained
Rent-to-Own is a model like no other, an opportunity for investors and tenants to share in a property and leverage off DomaCom’s unique fractional investment platform, a modern form of syndication where ownership can be shared to present a pathway to ownership for renters and secure tenancy for investors.
For developers the Rent-to-Own model can lead to multiple sales to a demographic that is struggling to get into the property market, build confidence and facilitate intergenerational investment opportunities within families.
It is all about creating syndicates by their family and friends or random investors seeking income and capital growth and diversification in the residential sector.
How does Rent-to-Own work?
Rent-to-Own is based on sharing the developers distribution margin equally between investors and tenants. This is the margin that would have been used to pay sales commission and marketing costs.
Developers can list one or more properties with DomaCom at the full list price to be designated Rent-to-Own.
DomaCom will instruct due diligence on the property, review of the contract of sale, independent valuation and property inspection.
DomaCom will arrange debt up to 60% LVR and seek investors for the remaining 40%.
Investment starts at $2,500 and investors can also apply for tenancy through DomaCom’s designated property manager.
On exchange of the contract of sale, the developer rebates the agreed percentage of the sale price which is used to “gift” tenants 5% of the equity in the property with the remainder of the rebate going to the investors giving them a reduced price.
The property is held in a sub-fund of the DomaCom Fund and units are issued to investors at 1 unit per $1.00
Tenants can also acquire units over time by purchasing them from their co-investors via DomaCom’s online secondary market thereby increasing their equity further.
For further information developers should contact
Spiro Skiadopoulos, Third Garden Property – +61 411 443 423
Sal Aljaml, Imperial Wealth P/L – +61 488 996 699
Alternatively you can email DomaCom at email@example.com