Reversible property is a good investment in the medium and long term. Although they do not generate income, the reversals are superior when it comes to capital appreciation. Easy and virtually risk-free investment, reversal real estate investments also offer potentially high returns. And since it is nearly impossible for property prices to fall to half their current value, it makes business sense to invest in reversible properties.
In reversal real estate investing, you simply buy a residential property from one owner at a heavily discounted price. A reversible property can be purchased for approximately half its value, depending on the age of the seller and the location and characteristics of the property. Payment is made in cash or in monthly installments. The owner continues to live in the property as a tenant without paying rent and with full legal rights to remain in the occupation until his death or until he voluntarily vacates it. Then, ownership of the property returns to the buyer.
Since the owner continues to live in the home as his own, he is still responsible for the general upkeep of the property, such as utility bills, construction insurance premiums, and capital tax while continuing to occupy the home.
Reversal investments are basically a gamble on the life expectancy of the owner. The buyer pays the monthly reversible annuities until the owner dies.
Reversible properties are of two types: leased, which means that the owner lives on the premises, and not rented, so the seller does not live on the property. In this case, the buyer can use the property or rent it. The payment can be in a lump sum, monthly annuities, or a combination of both. Typically, institutional investors, wealthy individuals, and those looking for a vacation home in the future would greatly benefit from reversible ownership.
Investing in reversal property is beneficial to both the owner (seller) and the buyer. For the seller, it is as if he were granted a lease that will last until the end of his life. You are relieved of responsibility for large payments on your property, such as major works and the land tax. You also receive additional income in the form of a lump sum in cash or monthly annuities, which could greatly supplement an older person’s pension. More importantly, you don’t have to sell your own home or move, which increases your stability and peace of mind.
For the buyer, investing in reversible property is an excellent opportunity. The property is not only available at a great discount, most of them are studios, apartments, villas and commercial establishments located in privileged areas. Since most of these properties were initially purchased as a retirement home, they are often located in a major city or quiet countryside.
Reversal property is definitely one of the safest and least hassle ways to invest in a property. It is best for those who wish to have a vacation home when they retire. Of course the property is well maintained by the owner as he still considers it his home even though the property has been transferred. By investing in a reversal property, one is sure to acquire a valuable and well-maintained home in the near future.
Copyright (c) 2008 Parmdeep Vadesha
