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oh yeah ... the concept definitely has lots of unanswered questions :P > I'm not sure I follow, if they take their 20% equity (to put into the next property) t

oh yeah ... the concept definitely has lots of unanswered questions :P > I'm not sure I follow, if they take their 20% equity (to put into the next property) they wouldn't be entitled to receive any rent from the next tenant. I think maybe I wasn't as clear as I could have been ... what I mean is 20% ownership here. So when they "leave", they're not removing that value from that property. They maintain ownership of that "20%", and reap the rewards until their share is ultimately bought out and dwindles to zero. The corollary to that, is that they wouldn't have to take the value in order to finance their next tenancy ... if they could find another place to enter into the same kind of agreement, they simply move in and start paying there.

bane 10y ago
Here's a crazy idea that actually exists. In a handful of countries tenants pay something colloquial called "key money". It's usually a lump sum, say $150k on up, to a landlord. The landlord invests the money and makes what they can off of it and the tenant lives rent free. When the lease is up the tenant gets back their key money to take elsewhere.
- pkaye 10y ago
  Why not the tenant invest the lump sum themselves and give the interest to the landlord?
  - bane 10y ago
    If you fail to pay, the landlord gets your lump sum. It's a security deposit on the property in essence.
- CodeCube 10y ago
  that's really interesting, thanks for posting about it I'll look up more info :) However, unfortunately in a scheme like this, the tenant would have to have 150k in the first place. I'm looking to find ways to lower barriers to entry so that one doesn't have to be rich.
  - bane 10y ago
    Sorry for the slow answer, yes, they'd have to have the money up front. It works better and is more common in multi-generational households where they can pool their resources and savings across generations. There's a version where the deposit is much smaller (say 10k) and rent is still payed. The example I know the most about is: https://en.wikipedia.org/wiki/Jeonse https://en.wikipedia.org/wiki/Jeonse

bane 10y ago

Here's a crazy idea that actually exists. In a handful of countries tenants pay something colloquial called "key money". It's usually a lump sum, say $150k on up, to a landlord. The landlord invests the money and makes what they can off of it and the tenant lives rent free. When the lease is up the tenant gets back their key money to take elsewhere.

pkaye 10y ago
Why not the tenant invest the lump sum themselves and give the interest to the landlord?
- bane 10y ago
  If you fail to pay, the landlord gets your lump sum. It's a security deposit on the property in essence.
CodeCube 10y ago
that's really interesting, thanks for posting about it I'll look up more info :) However, unfortunately in a scheme like this, the tenant would have to have 150k in the first place. I'm looking to find ways to lower barriers to entry so that one doesn't have to be rich.
- bane 10y ago
  Sorry for the slow answer, yes, they'd have to have the money up front. It works better and is more common in multi-generational households where they can pool their resources and savings across generations. There's a version where the deposit is much smaller (say 10k) and rent is still payed. The example I know the most about is: https://en.wikipedia.org/wiki/Jeonse https://en.wikipedia.org/wiki/Jeonse