Factors When Choosing Between Equity Sharing Agreements vs. Selling Property Outright vs. Reverse Mortgages
The Pros and Cons of Equity Sharing Agreements, Selling Property Outright, and Getting a Reverse Mortgage
When it comes to deciding what to do with your property, there are a few different options to consider. One option is to enter into an equity sharing agreement, which allows you to share the ownership of the property with someone else. Another option is to sell the property outright. And finally, you could get a reverse mortgage, which would allow you to stay in the property while still receiving income from it.
Each of these options has its own set of pros and cons that you will need to consider before making a decision. Here is a look at the pros and cons of each option:
Equity Sharing Agreement
Pros:
-You can keep ownership of the property while still receiving income from it.
-You may be able to reduce your tax liability by sharing the ownership of the property.
-It can be a good way to finance a purchase without having to take out a loan.
Cons:
-You will have to split the profits from the sale of the property with the other owner.
-You will need to find someone you trust to enter into an equity sharing agreement with.
-It can be difficult to get out of an equity sharing agreement if you change your mind.
Selling Property Outright
Pros:
-You will receive all of the profits from the sale of the property.
-You will no longer have any ownership stake in the property.
-It can be a quick and easy way to get rid of a property.
Cons:
-You will no longer have any income from the property.
-You may have to pay taxes on the sale of the property.
-It can be difficult to find a buyer for the property.
Reverse Mortgage
Pros:
-You can stay in the property while still receiving income from it.
-It can provide a source of income in retirement.
-It can be used to pay off other debts or expenses.
Cons:
-The interest on the loan can add up over time.
-The loan will need to be paid back when the property is sold.
-It can be difficult to qualify for a reverse mortgage.
© 2024, Exuity