While we’re on the topic of low-minimum real-estate investments, here’s a doozy of an idea for the Houston residential market:
[financial] derivatives that would let people continue to live in their houses, and keep legal ownership to them, without being exposed to fluctuations in the homeâ€™s value.
Wanna get out of the real-estate market but don’t want to sell your home? An investor will pay you a monthly fee in return for the profit that may result if your home increases in value. Or pay an investor a monthly fee to ensure that you won’t get hurt if your home drops in value. Or find an investor in each category to offset each other. You keep the title to your home, but you don’t have to worry what the market does.
Neat, huh? The concept is called SwapRent, and it’s the brainchild of Ralph Y. Liu, a financial-derivatives expert and entrepreneur who lives in California.
Sorry, you can’t do it yet:
Liu has tirelessly sought support from lawmakers, regulators, and investment bankers for his concept. He says several bankers have told him they’re interested but don’t want to be the first to move. Says Liu: “Nobody wants to stick their necks out.”
Where would all these new investors come from, to buy up the appreciation potential of Houston homeowners who are willing to swap their upside for a monthly income—or to get cash in return for protecting homes from drops in property values?
A lot of them would probably come from somewhere else: New Houston real-estate investors. Playing our market—from a safe distance.