Every day there’s more news about how unattainable Canada’s real estate market is. Just when we think it can’t possibly get worse, it does. Trying to save up for the downpayment and qualify for a mortgage, while home prices and rents are rising has most aspiring homeowners stuck renting. New government measures like banning most foreign investors from buying real estate in Canada and allocating billions to build more homes highlights a real problem that most young Canadians are currently experiencing - being locked out of the real estate market and seeing no viable option to ever own. So, it’s not surprising that Key’s unique co-ownership model is resonating. It allows you to get on the property ladder, have a place to call home, and start building home equity with an initial investment as low as 2.5% of the value of the condo. Since Key is a relatively new innovative model we get lots of questions. We’ve rounded up the most common ones we’re asked to give you more insights into how our co-ownership model works.

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1. How does Key’s co-ownership model work?

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Our co-ownership model allows you to start owning with an initial investment of just 2.5% of the value of the suite. You become an Owner-Resident and live in the suite. You can invest more at any time and in amounts that work best for you. As the value of your suite increases, so does the value of your ownership. In the future, if you decide to sell you will receive your equity, plus your share of the appreciation, and the appreciation from our Co-financing Benefit.You pay a monthly residency payment on the portion of the condo you don't yet own. It also covers your building maintenance fees, and property taxes. Monthly payments are based on market rents and are reduced based on the amount you own. Plus, each month $50 of your monthly payment automatically goes towards building your home equity. For most Key condos, the initial monthly payment starts around $2K. You have the option to contribute more to your equity at any time. Every time you invest more, you own more. This come with two benefits:

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1. The amount you pay is reduced based on how your ownership has increased;
2. Your home equity can grow faster since your appreciation is based on your ownership.

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2. How is Key different from renting?

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Unlike renting, at Key, Owner-Residents can reduce their monthly payments by increasing their ownership stake. They also have more security of residency, both the Owner-Resident and property owner are signed to a three year agreement.

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3. How is Key different from rent-to-own, and a traditional mortgage?

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Similarly, the key difference between rent-to-own models vs our co-ownership model is that with Key you’re a homeowner building equity from day one instead of having to rent for a period of time. Lastly, unlike a traditional mortgage, which typically can require a 20% down payment, at Key you just need a downpayment of 2.5% (or $15K for most Key condos). This is how we make homeownership a possibility for people struggling to save for a large down payment or to qualify for a traditional mortgage. Plus, since there’s no mortgage, Owner-Residents don’t have to be tied down to a long-term commitment for years to come and can instead enjoy the flexibility and freedoms associated with our co-ownership model.

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4. How does Key get properties and how am I safeguarded against the interest of property owners when they want to sell?

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Key partners with property owners who add their condos to the Key platform, they are usually locked in for a period of 3 years. After this initial period, if the property owners want to sell, Owner-Residents receive the first opportunity to buy. If Owner-Residents don’t want to buy and prefer to continue co-owning, then Key has the option to buy the condo, and Owner-Residents can continue to increase their ownership over time and build home equity. If neither the Owner-Resident or Key decides to buy the condo, then it’s listed on the market and the Owner-Resident and the condo owner benefit proportionally from any profits. In this situation, the Owner-Resident is given six months notice so they have lots of time to decide where they want to live next. They can also take the home equity they’ve built and move into another Key suite to continue co-owning.

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5. How does Key make money and what’s in it for us?

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Our goal is to provide a new way for all the people who are locked out of owning to have access to the financial and social benefits of homeownership. Key makes money in a few ways, including through asset management, professional property management and by driving greater efficiencies in how the suites are managed. Plus, longer term, Key is developing a digital exchange and curated marketplace that will benefit our Owner-Residents.

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6. As a co-owner, can I rent out my Key suite?

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Our strict social policies ensure that Key Suites do not become secondary income properties for people simply looking to buy in order to rent out. Everyone who lives in a Key suite is an Owner-Resident, like you. As an Owner-Resident, you’re able to share your monthly payments by renting out of the rooms to roommates, as long as you’re still living in the condo.

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7. How do I get pre-approved and what are the criteria involved?

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Our pre-approval process is simple and straightforward! Unlike the tedious processes involved in securing a traditional mortgage with a bank, our pre-approval process is fully automated and takes an average of 15 minutes to complete and is processed within 2-3 days. The main criteria we look at  are as follows:

• Personal Information: This section focuses on your living situation to register you with building management and insurance.

• ID verification: In order to verify your identity, Key requires a photo ID along with a selfie to match your identity.
• Financial Information: Key checks your proof of income and credit score.This is verified through your bank account or by manually uploading your recent T4.

Once these steps are completed and our team has a chance to look over your application, we’ll reach out to you to let you know if you’ve been approved. At Key, we’re on a mission to make real estate a source of prosperity and freedom for everyone. If you have more questions about our co-ownership model, visit our FAQ page or book a call with our VP here.