Risks

Some risks of investing and of our Services are set out below. Additional risks may be set out in the Home Trust Conditions or other Offer Materials of any Home Trust in which you invest.

General investment risk

Returns on your investment are not guaranteed. Making an investment involves risk and you could get back less money than you put in.

Residential property values can increase or decrease, influenced by various factors including economic conditions, political changes, and taxation. These factors can impact the residential property market and, in turn, the value of individual property that a Home Trust is invested in. The value of Shares could be adversely affected by a downturn in the residential property market, particularly in terms of capital value and/or a decline in residential rental yields.

Damage and insurance

There are risks of defects and damage to the property, for example, normal wear and tear, damage caused by tenants, or natural disasters. To manage these risks, the property will be insured, and a bond will be held by New Zealand Tenancy Services. However, certain events may not be insurable. The property's value could be adversely affected if losses occur due to uninsurable risks, under-insurance, or denied claims. These factors may, in turn, impact the value of your investment.

Valuation risk

Property valuations are based on valuers’ opinions at a specific time and influenced by current economic conditions. They are inherently subjective, and significant differences can arise between valuations and actual sale values.

Cashflow shortfall

Each Home Trust will maintain limited cash reserves. If it incurs unexpected costs that cannot be recovered from tenants, insurance, or bonds, or unexpected falls in rental income, it could be reliant on third-party financing (for example, bank borrowing) or requiring further contribution from investors (this would require support of at least 75% of all investors of that Home Trust). In the unlikely event this situation arises, we may need to sell the property and wind up the Home Trust to meet the shortfall.

Liquidity risk

While we provide a secondary market for the Shares, there is no guarantee that there will be willing purchasers at the time you want or at the price you set. You should ensure that you are comfortable having your money committed until such time.

Legal, regulatory, and tax

Your investment, and any returns you receive may be subject to the tax laws of New Zealand and other jurisdictions. We do not provide any tax advice. You are solely responsible for understanding how your activities in relation to the Platform will be taxed under the laws applicable to you.

Changes in any law (including tax laws), regulation, or government policy in New Zealand could have an impact on the performance of your investment.

Processing of transactions

There may be times that transactions cannot be settled or are delayed. Processing times differ for each transaction and will depend on our requirements and the requirements of third parties.

Other information

Homeshare and any person associated with us (including directors, shareholders, employees, and any other related parties) may invest in Home Trusts via the Platform or may have other interests (including as the original vendor) in underlying properties of Home Trusts.