strategy
Promoting serial ownership
Description:
A serially owned property changes owners, via a trust, but there is no exchange of capital, only a commitment to future cash flow, meaning that they will get an income from the property. The extent or size of that commitment is not based on a real estate market valuation, but on the existing serial owner's investment in that property and on the usefulness valuation given to it by the trust. Having negotiated with the trust and signed a contract for that property, the new serial owner begins by paying a premium over the trust's basic rental value of the property for a fixed period (such as six years) after which the rental value drops back to basic and therefore goes into a slow decline. How far and how fast the rental value drops, relates to how much mortgage is paid off and what the trust's costs are for maintaining and upgrading the property.The premium from the current serial owner's investment goes directly back to the previous serial owner, paying off their investment in the property, as does also a proportion of the basic rental value, which is a measure of how much they have improved the property while they owned it. The premium is also the new serial owner's investment in the property which they are due to receive back should they sell. The new serial owner is in contractual agreement with the trust which gives them most of the usual privileges of ownership, with the obvious exceptions of selling to the real estate market and of degrading the property.
Facilitated by:
Creating community land trust Subjects:
Information → PeriodicalsCommunication → Promotion
Commerce → Property
Type Classification:
G: Very Specific strategies Related UN Sustainable Development Goals:
