3.0 KiB
Motivation
"Neither a borrower or lender be, but especially, do not be a lender."
It is better to own than to rent. This is not a practical life-advice statement, but a recognition of reality. Rentership is actually a lesser good than ownership. Why is this? Because it is a separation of use from ownership.
The renter finds himself a transient, never willing (or perhaps, even capable) to put in the effort to improve, maintain, and personalize (inculturate) that which he uses. The lender finds himself estranged, less willing to improve and maintain that which he owns beyond what he suspects he can get a financial reward for, and certainly will refuse to personalize it, as it will scare off tenants.
At the same time, though, in our present economy, few have the capital to purchase property, and those who do, are given funds at a usurious rate, and often lack guidance from others on how to actually fix or maintain their house. Many people these days also lack the knowledge, tools, and community labor to make improvements or renovate property.
This proposes a way for investors to truly invest in their community by turning more of their neighbors into owners rather than renters; in turn, creating a community in which people are invested and thus care about their surroundings. This form of investure, as it will be seen, requires a good deal of trust - and therefore, necessarially becomes a personal relationship rather than a mere transaction.
Abstract Solution
The general scheme proposed is a sort of 'rent-to-own', coupled with a proper understanding that an investor should have personal involvement with this process.
A moneyed investor, or set of investors, buy or build a house, or multiple houses. They seek out tenants, who pay for the property a month at a time. Their payment is demarcated in two pieces: a principal payment, which goes towards the value of the house itself, and a leasing fee*, which is paid to the investors. The investors, in return for this fee, are expected to provide guidance in how to maintain the property, assistance in rebuilding or improving the property, and mentorship in home-keeping in general. The intent is truly for the tenant to become a full owner, and so in his time as a tenant, to make all of the improvements and customizations (within reason) he sees fit.
( * this leasing fee may be a fixed-rate, or more complex pending improvements being made to the property)
If the tenant decides to vacate the property, he will receive the principal payments he made in full - but none of the leasing fees - and the property returns to full ownership of the investors. If the tenant succeeds in paying all principal payments back to the investors, he now owns the property in full. The principal, regained, may be paid back to the investors, or another property may be purchased, continuing the process. (There is an obvious temptation to construct a pyramid scheme here, by taking the principal payments and buying new property with them before the payments are made in full, but it must be avoided.)