Property fund manager and reverse mortgage lender DomaCom has acquired the first asset for use in a new rent-to-own investment product.

DomaCom announced yesterday that it has acquired a one-bedroom apartment in Moonee Ponds, which will be offered to a group of investors in a unitised structure and then rented out.

Under the rent-to-own model, the tenant will pay a commercial rent, which will be paid out to unitholders.

In addition, the tenant will receive 1 per cent equity in the property each year over five years and has the right to acquire additional equity over time.

Under the structure, the tenant becomes a part owner. According to DomaCom chief executive Arthur Naoumidis, the benefit for the investors it that it will lessen tenancy risk, while the benefit for the tenant is that it gives them an opportunity to build up equity in residential property.

Naoumidis said: “Rent-to-own has the potential to change the outlook for people who may have thought they would be renters for life.”