You can help the next generation buy their first home and invest in your future at the same time. All without becoming a landlord.
If you’ve got $100,000 - $200,000 to invest, then we should talk.
5 years is the minimum period of time for investment. Beyond 5 years, the investment carries on indefinitely, until either you or the buyer wants to sell.
If you’re not confident you are able to invest for at least 5 years, then you should not go ahead with this investment. But we do understand that the unexpected happens.
The first thing you should do if you want to withdraw early is contact us.
We’ll see if your buyer is willing to sell or take over your share. However, they are under no obligation to agree to this.
Failing that, we can see if there are any investors willing to take over your Co-Ownership Agreement. However, there are no guarantees.
Your buyer is committed to this investment for a minimum 5 year period. However, circumstances can change.
If this happens, you and the buyer can choose to sell the property. However, you are under no obligation to do this.
Leveridge can also look for another buyer who may be interested in replacing your existing buyer. There are no guarantees and the Co-Ownership Agreement can’t change without your permission.
The title of the property will be in the name of the buyer, along with the mortgage. There will be a Co-Ownership agreement, which notes your interests in the property and you will also be registered as a 2nd mortgagee to protect your share.
Contact us as soon as possible.
We’ll help them go through their options, like applying for a mortgage repayment holiday, claiming on their KiwiSaver under the financial hardship clause, bringing in flatmates or utilising any cash savings they may have. Worst case, we’ll try to find a new buyer to take over their property and obligations.
It is a condition of entering into this investment that the buyer must have medical insurance, income protection and life insurance. They are responsible for paying the premiums for the entirety of the investment.
If the buyer defaults on their obligations, you have the right to purchase their share. If you don’t wish to purchase their share Levridge can look for a new buyer to take over the ownership. Of course there are no guarantees.
If both you and your buyer are unable to agree on the current market value, then you’ll need an independent registered valuer.
If you don’t agree on an independent registered valuer, then you’ll both get your own registered valuation from an independent registered valuer. The property’s value will be the average of the two valuations.
A Co-Ownership Agreement will be signed by you and the buyer, which will outline the terms and conditions, and your interest in the property.
In addition, a second mortgage will be registered in your favour against the property, which will prevent the property from being sold without your interests being met and prevents the buyer from increasing bank borrowings as equity against the property when it increases.
The buyer is responsible for payment of all rates and council levies.
The buyer is responsible for building insurance, and their own personal medical insurance, income protection and life insurance. This ensures that the property and the buyer’s servicing ability is protected.
The buyer is responsible for the costs of all non-major repairs and day to day maintenance. This does not include capital expenditure, which is defined as being investment which will improve the value of the property. Capital expenditure is shared equally between you and the buyer. You both must agree to the scope of work and costs before any work begins.
If this will increase the value of the property, then you must agree on their plans. The costs will then be shared equally between you.
If you’re not able to invest, but agree on the work, then the buyer will pay for the renovation upfront, record all the costs in writing and keep all the invoices. You’ll then need to reimburse them once the property is sold or you sell your share to the buyer.
A Co-Ownership Agreement is a legal document between the buyer and investor that confirms all the terms and conditions to this partnership.
The reason there is a minimum 5 year time period to this Co-Ownership, is that this should see you through the normal ups and downs of the property wave. If a recession were to happen, they generally last for 6-18 months, and we tend to see values improve substantially afterwards. However, this can’t be guaranteed. There is always risk of property values remaining stagnant or even going backwards, but hopefully a minimum 5 year period is enough to ride this out.
Other costs and fees you’ll need to budget for are legal fees, Levridge fees, and costs for reports such as registered valuation, building report, weather tightness report, LIM report and any other reports that might be appropriate to satisfy due diligence. Please refer to our fees for a full breakdown.
If one party approves the property for purchase after all due diligence reports have been received and the other party doesn’t, then either party has the right to pull out of the purchase at that point.
Levridge charges a one-off upfront fee equivalent to 1% inc GST of the property purchase price for facilitation, matching and execution of this investment structure.
We also provide ongoing service and advice as and when required, and are dedicated to ensuring that the long term outcome is a success for both parties. Levridge charges a percentage-based success fee for this service which is 5% of the net capital growth. No profit, no fee.
Levridge is here to provide assistance, not just at the beginning of this investment, but right through to realisation of the asset of your property. You can contact Levridge at any stage for help or advice.
Check out the links below, if you still have questions please use the contact form below to get in touch.
We love property and we want to help you make the most of it.
Let's start the conversation and see what we can do for you.
Phone: 09 815 1918
Visit: Level 9, 4 Williamson Ave, Ponsonby, Auckland 1021
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