How does this real estate investment Fintech work?

Establishing an investment property can be a long process, and one of the most difficult steps is finding suitable tenants.

This is where Futurerent comes in. Futurerent is a real estate technology platform offering investors up to $ 100,000 upfront to cover rental income. This can help in the early stages of real estate investing where it can be difficult to find tenants.

However, Futurerent is not a personal loan. So what is it? Read on to find out how it works.


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Buying an investment property or looking to refinance? The table below shows home loans with some of the lowest interest rates in the market for investors.

Lender

Rate type Gap Redraw Ongoing charges The initial costs LVR Lump sum reimbursement Additional refunds Pre-approval

Variable More details
GET A FULL FULL ACCOUNT WITH NO ADDITIONAL COST

Low-rate home loan – Premium (principal and interest) (investment) (LVR
  • No upfront or ongoing fees
  • 100% clearing account
  • Additional refunds + reprint services

Variable More details
REFINANCING IN MINUTES, NOT WEEKS

Nano Home Loans Variable Investor, Principal and Interest (Refinancing Only)

  • Refinancing only. Fast online application
  • No Nano fees. 100% free sub-account clearing
  • Mobile app, Visa debit card and instant payments
Variable More details
EASY ONLINE REQUEST

Garden investment loan (principal and interest) (LVR
  • No administration fees
  • Unlimited additional refunds
  • Unlimited free withdrawals

Variable More details
FREE RECOVERY EASE

Smart Investor Home Loan (principal and interest) (LVR)
  • Possibility to add an offset for 0.10%
  • Fast turnaround times, can meet a 30-day settlement
  • No ongoing or monthly fees

Basic criteria: a loan amount of $ 400,000, variable, fixed, principal and interest (P&I) mortgage loans with an LVR (loan-to-value) ratio of at least 80%. However, the table “Compare mortgages” allows calculations to be performed on variables selected and entered by the user. All products will list the LVR with the product and price which is clearly posted on the product supplier’s website. Monthly repayments, once the basic criteria are changed by the user, will be based on the advertised rates of the selected products and determined by the loan amount, type of repayment, loan term and LVR entered by the user. /you. * The comparison rate is based on a loan of $ 150,000 over 25 years. Please note: this comparison rate is only true for this example and may not include all fees and charges. Different terms, fees, or other loan amounts may result in a different comparison rate. Prices correct as of December 28, 2021. See disclaimer.

What is Futurerent?

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Savings.com.au spoke with Futurerent co-founder and CEO Godfrey Dinh (pictured above) to find out how the platform is changing real estate investing.

Futurerent provides real estate investors with up to $ 100,000 in rental income up front. There is technically no interest rate on this advance – unlike a personal loan. Instead, investors are charged a monthly administration fee of 0.5% of the total amount advanced.

“Futurerent is a quick, easy, and loan-free alternative to banks that gives real estate investors up to $ 100,000 in rent, paid in advance,” Dinh told Savings.com.au.

“[We are] help real estate investors finance renovations, new property purchases, small businesses and other investments.

If an investor has a rent of $ 3,000 per month ($ 36,000 per year) takes an advance of $ 36,000 through Futurerent and pays back $ 1,000 per month, it will take 36 months to repay. At 0.5% of $ 36,000, their monthly administration fee will be $ 180 per month. Over 36 months, this will cost $ 6,480, which equates to an interest rate of 6% per annum per annum.

How does Futurerent work?

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“We pay our customers within two business days, whereas banks have been known to make real estate investors wait two to three months to refinance,” Dinh said.

“Real estate investors can save hours of paperwork when using Futurerent. We do not require valuation, bank statements or income verification. We get everything we need from every client’s property manager.

How is Futurerent different from a loan?

“The main difference between Futurerent and any loan is that you don’t borrow money – you just get your rent paid up front. This means that there is no paperwork associated with a loan like utility and appraisal ratings, no impact on your credit report, and no interest, ”Mr. Dinh said.

“The rent paid to you in advance is reimbursed in equal installments over a maximum of 3 years, from part of the rent paid by your tenant. Futurerent’s 6% cost is also paid out of rental income, like your property management fees.

“This means Futurerent customers pay nothing out of pocket and refunds are suspended or adjusted if the tenant leaves the unit or the rent changes. “

What sets Futurerent apart from other sources of funding for investors?

The main route of funding for investors looking to access capital through their property is through refinancing or releasing equity, and Mr. Dinh said Futurerent may be a favorable alternative to these options.

“Our low fixed cost of 6% per year leaves more money in our clients’ pockets than other financing services. Refinancing a home loan can cost up to $ 3,000 in additional fees on its own, plus tens of thousands of mortgage breakage and insurance fees, ”he said.

“Add in the interest payments and it’s clear why refinancing is an inefficient and expensive way for real estate investors to access capital.”

Futurerent did a math and found that if a real estate investor wanted access to $ 25,000, refinancing to add that amount to their home loan would cost them an additional $ 15,370 in interest over 30 years, on a variable interest rate. by 3.42%.

By using Futurerent to access $ 25,000, investors can pay it back in three years, and it will only cost them a maximum of $ 4,500. If they choose to pay it off in a year and a half, their cost is cut in half to $ 2,250.

“Compared to 7-year personal loans and 30-year home investor loans, our short repayment terms of 1.5 to 3 years allow real estate investors to avoid years of additional interest payments,” said Mr. Dinh.


Photo by R Architecture on Unsplash

The entire market was not taken into account in the selection of the above products. On the contrary, a small part of the market has been envisaged. Products from some vendors may not be available in all states. To be considered, the product and the price must be clearly published on the website of the supplier of the product. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au and Performance Drive are part of the Savings Media group. In the interest of full disclosure, the Savings Media Group is associated with the Firstmac Group. To learn more about how Savings Media Group handles potential conflicts of interest, as well as how we are paid, please visit the website links at the bottom of this page.