iKauf Realty Invest

Investment

Shared Property Titles

The benefits of investing in real estate have been widely publicized recently, thanks to the rise in house prices and rental values in recent years, but one of the most accessible and high-yielding real estate investment avenues, which is often overlooked, is investment in shared ownership. Shared ownership is the purchase of square meters (m2) in shared ownership, i.e. in co-investment with other investors. When a real estate investor buys bonds corresponding to square meters of gross private area of a real estate project, it is a deal between an investor and a real estate developer at the start of a project, in which the investors earn income over a certain period of time, due to the anticipated value of the purchase. Investment in shared ownership offers investors the opportunity to invest at a lower entry point than traditional real estate investments, while benefiting from a lucrative income stream from the anticipated purchase price and without intervention.

Title deed (x) = x* square meters (m2) of gross private area

What are Shared Ownership titles?

A shared ownership real estate bond is essentially a method that real estate developers can use to raise funds to build their site in the form of an anticipation of future purchase of part of the property, legally binding from real estate investors, used to raise funds during the early stages of development.

How do shared property titles work?

When a real estate developer is looking to finance a new project, they can offer people the opportunity to invest in Shared Ownership instead of, or in addition to, taking out a loan or selling shares to raise the necessary funds. Investors will buy a security that represents square meters of private gross floor area of a real estate project for a defined amount and a specific rate of return on the anticipated value of the future purchase defined by a term and delivery date of the property.

For example, if an investor buys part of the property for €20,000, and has brought forward €4,000, at a rate of return of 6% for 3 years (expected delivery date of the property), over time their return will be €720.

Are shared ownership bonds a good investment?

Shared ownership real estate securities are an extremely good investment, offering investors the opportunity to obtain income through a less volatile method than shares, and at a lower purchase price than traditional investment properties. Shared ownership real estate securities are also usually offered at a lower value than traditional real estate investment opportunities, making them more accessible to a wide range of investors.

How risky are shared ownership bonds?

As with all investments, shared ownership real estate securities come with their own risks. With this in mind, it is important to find a reputable company with a proven track record of paying investors on time and delivering successful projects within budget to invest in.

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