A newly launched rent-to-buy platform is reporting interest from budding homebuyers in regional areas following its first expressions of interest round.<\/p>\n
Startup OwnHome aims to eschew the traditional deposit-saving phase by purchasing a property on behalf of an individual and then renting it back to them for a set period while they accrue ‘equity points’ of 2.5 per cent of the purchase price each year.<\/p>\n
Renters then have the option to purchase the property at a pre-agreed strike price, calculated as the purchase price plus 3.8 per cent per annum for each year of the agreement.<\/p>\n
This theoretically allows them, in a rising market, to capitalise on any additional capital gains realised during the rental period.<\/p>\n
\u201cCustomers realise all of the growth rate,\u201d co-founder Tim Harley said, pointing to recent price growth rates in cities.<\/p>\n
\u201cMonthly payments are calculated at 7.05 per cent of the original purchase price, on a per annum basis.<\/p>\n
\u201cMonthly payments are roughly equivalent to what someone saving for a similar property might pay by renting and saving money each month, although the company acknowledges they could be more expensive in some situations.\u201d<\/p>\n
The company recently began taking expressions of interest from prospective homebuyers.<\/p>\n
Co-founder James Bowe said that within 10 days of expressions opening, 130 applications had been received.<\/p>\n
\u201cWhile applicants had disproportionately been in Sydney, there had been applicants seeking housing in regional areas.<\/p>\n
\u201cI think there has been a fundamental shift coming out of COVID-19 that has put a premium on space a place of work, school and their living space, work dynamics have shifted and what was previously too long of a commute has changed,\u201d Mr Bowe said.<\/p>\n
Finder Home Loans editor Sarah Megginson said that products like OwnHome could work for certain buyers, but that prospective customers should make an individual assessment based on their financial situation.<\/p>\n
\u201cThey suit a certain person, or a certain market, but the really important thing to understand is that you’re going to pay a premium for the service,\u201d Ms Megginson said.<\/p>\n
\u201cThe product is a form of forced savings and allowed buyers to pay a premium in order to get a foot on the property ladder now instead of waiting.\u201d<\/p>\n
Ms Megginson advised buyers interested in platforms like OwnHome to consider their exit options should they experience a change in circumstances and to \u201cread the fine print.\u201d<\/p>\n
Mr Harley said that OwnHome customers who no longer wished to live in their property could choose to exercise the option, get a mortgage and then rent the property out, or sell their \u201cvalue-accrued\u201d option on to another customer.<\/p>\n","protected":false},"excerpt":{"rendered":"
A newly launched rent-to-buy platform is reporting interest from budding homebuyers in regional areas following its first expressions of interest round. Startup OwnHome aims to eschew the traditional deposit-saving phase by purchasing a property on behalf of an individual and then renting it back to them for a set period while they accrue ‘equity points’ […]<\/p>\n