It’s the Australian dream to own your own home - but Property prices are making it unaffordable to enable - young homebuyers to enter the market.
Enter James Bowe and Tim Harley, co - founders of OwnHome - backed with seed funds of 3.6m from Entree Capital, Global Founders Capital, AfterWork and InVentures.
They are keen to invest more to scale the Fintech
Ownhome have a goal - to have every single customer to be happy, excited to have the chance to be a homeowner before they thought possible.”
The Model - what OwnHome Does
Under its rent to buy model, OwnHome purchases homes for clients, who then move in, pay rent, build up equity in the dwelling with the opportunity to buy at a pre-agreed rate within three to seven years.
OwnHome makes its money from the rent charged. In an example used by the company, if a person buys a home for $1 million they will pay $5900 in rent a month.
They will accrue equity of 2.5 per cent in their dwelling each year, in this example $25,000 for an annual outlay of $70,800.
Over five year clients will have built up 12.5 per cent ownership - enough OwnHome says to switch to a bank mortgage and convert the title to their name.
Property price appreciation is pegged at 3.8 per cent and Mr Bowe said the certainty of the end price is a major incentive for consumers scared of getting left behind due to rapid increases.
“It takes 10 years longer to save a deposit than it did 50 years ago. Millions of Australians, mostly our generation, are stuck in the rent cycle. We just want to level the playing field,” Bowe said.
The Marketplace
Mr Harley said OwnHome has a waitlist of 100 potential clients and is working through the mechanics of purchasing properties for several qualified applicants.
“We are really excited about the size of the opportunity,” Mr Harley said.
Copying a successful model
Australian rent to buy startup OwnHome has secured $3.6 million in seed capital from investors including Entree Capital - keen to back their growth and replicate the success of Home Partners of America, bought last month by Blackstone Group for more than $8 billion.
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