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Why joint purchase?

Friday, November 16, 2012

Joint purchase is a method of purchase whereby the purchase of a particular property is made by two or more parties. There are a number of reasons why we choose joint purchase option in real estate investment.

#1. Shared risk
A joint purchase is an effective risk diversification strategy, for all risks of investing in real estate funds will be shared among all parties. For illustration, the profit or losses are shared among all parties based on previously agreed-upon ratios.   
#2. Greater cumulative purchasing power
The creation of cumulative purchasing power through joint purchase comes from greater capital. When there are two or more parties who are willing to buy a property together, they can start looking at properties with higher price tag that they otherwise would not be able to afford individually. They have more selection now.   

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Alecia Tan, EzineArticles Platinum Author