In equity sharing both parties benefit from the relationship. Equity sharing, also known as housing equity partnership (HEP), gives a person the opportunity to purchase a home even if he cannot afford a mortgage on the whole of the current value. Often the remaining share is held by the house builder, property owner or a housing association. Both parties receive tax benefits. Another advantage is the return on investment for the investor, while for the occupier a home becomes readily available even when funds are insufficient.
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Interesting Questions
If the homeowner wants to sell their share, they need to follow the terms laid out in the agreement, often giving the other party the first right of refusal.
Yes, agreements can be tweaked if both parties agree. It’s important to put any changes in writing to avoid misunderstandings down the road.
It's a good idea to have a legal expert on your side to make sure everything is above board and both parties are protected.
Like any investment, there are risks. The property value might decrease or the living conditions might change, which could affect everyone's share of the pie.
When the property is sold or appreciates in value, the profit is shared according to what each party invested. It's a win-win as both parties grow their investment.
Homebuyers and investors both stand to gain. Buyers get an affordable way to own a home, while investors can earn returns without being involved in daily management.