Home Ownership Investment
A home ownership investment is used by home purchasers to raise funds to buy real estate or by home owners to extract cash from a real estate investment. In exchange for cash, the home owner shares in some percentage of the increase and sometimes also the decrease in value of the real estate property. When the home is sold, the home owner settles by returning to the investor some amount of the proceeds from the sale based on the change in value of the real estate asset. Alternatively, the contract may have a maturity period or may provide the homeowner the option to terminate the contract at their discretion. In this case, an appraisal may be necessary to deem the price change of the asset and therefore the return to the investor. A home ownership investment is an alternative to a mortgage. Unlike a mortgage, home ownership investments typically do not require any interest or principal payments throughout the life of the contract which can be up to 30 years. A home ownership investment is comparable to an equity investment in a company wherein the investor only acquires exposure to the change in value of the underlying asset allowing the