DomaCom launch home equity release product for seniors

DomaCom launch home equity release product for seniors
DomaCom launch home equity release product for seniors

The crowdfunding platform DomaCom have launched their newest financial product, Senior Equity Release.

The Senior Equity Release will provide an adviser accreditation course that will enable financial advisers to provide sign-off to seniors 60 years and over looking for an equity release on their home.

DomaCom CEO Arthur Naoumidis said Senior Equity Release is the first financial product in this space.

"It will give financial advisers a significant place at the table in a growing and vulnerable sector that in many cases is asset rich and cash poor.

"Hence accreditation is crucial and the first group of advisers will be going through that over the next few days”. 

The announcement comes six and a half years after DomaCom sought to get the necessary reliefs from ASIC, who have substantially reviewed the product.

Senior Equity Release enables advisers to engage and connect senior aged clients with wealth accumulation clients such as SMSFs as both have a similar time horizon in terms of their respective needs.

Seniors can apply to sell a fraction of their home and must nominate the amount they wish to receive and how they wish to receive it, either as a lump sum or a regular monthly payment.

"The obvious investors for many would be family and friends who take an equity position in the property, perhaps using their super to do so," Mr Naoumidis said.

"For investors the benefits are also obvious. 

"They can choose properties in locations that interest them. 

"They can limit investment in residential property in accordance with their asset allocation and they can spread their investment across multiple properties in different jurisdictions to increase diversification."

 

The monthly payment is a staggered settlement of the equity release and has the flexibility to be dialled up or down to give the senior access to additional funds as may be required.

Investors in a senior equity release receive monthly rental income of 3% net of all fees and “own” a share of the capital value through units in a segregated sub-fund of DomaCom.

When the property is sold in full the vendor and investors receive their share of the sale price. This may occur when the vendor passes away or if they decide to move.

Investors also have the option to sell their units via DomaCom’s online liquidity facility which operates in a similar manner to an equities page with market depth and buy/sell order screens.

The company says the benefits to seniors and investors are quite compelling.

Seniors can unlock equity and stay in place for as long as they like and can rent out the property and retain the rent. 

It is suggested that this may present a good opportunity to trial retirement village living before they sell.

Maintenance, repairs and building insurance is shared by the vendor and the investors.

One of the biggest advantages to DomaCom’s SER is there are no postcode restrictions on the property.

DomaCom currently have a crowdfunding opportunity at Sapphire Wind Farm, the largest wind farm in New South Wales.

To read more about DomaCom click here.

Joel Robinson

Joel Robinson

Joel Robinson is a property journalist based in Sydney. Joel has been writing about the residential real estate market for the last five years, specializing in market trends and the economics and finance behind buying and selling real estate.

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