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ALL WE ARE SAYING IS GIVE RENT A CHANCE

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(1)

Club de Rentas

®

ALL WE ARE SAYING…

IS GIVE RENT A CHANCE

RENTAL HOUSING AS A VIABLE ALTERNATIVE FOR SOLVING HOUSING NEEDS & THE “CLUB DE RENTAS” PROJECT

(2)

Club de Rentas®

JOB INCOME SLOPE SOCIAL PROGRAMS EMPLOYMENT MOBILITY INVESTMENT CULTURE MORTAGE LOAN AVAILABILITY HOUSE PRODUCTION

DEMOGRAPHIC

GROWTH NEW HOUSEHOLD FORMATION HOME PRICES

Above salary growth

Housing development restrictions

More Dynamic

Enfocados a la Renta Steeper and with

higher expectations Not necesarily interested in inveting on a house Restricted to Formal or higher income segments Younger Independent, Roomies, Divorces Millenials demographic bonus

Home rental demand is growing at a very fast rate by a

series of multiple factors

The Moment

for Rental

Housing in

Mexico

(3)

Club de Rentas®

¿ How

Mexico City

compares

to other

cities in

terms of

rent?

40%

20%

48%

50%

Bogotá

CDMX: Inner Mexico

City

London

NY

Rental Homes Percentage Total Households

Fuente: BID, Eurostat, HBS

Share of Leased Homes in

CDMX

vs other world cities

14% Vivienda en préstamo (390,000 hogares) Aprox. 550,000 households DEMAND

Still, Mexico City’s home rental penetration is below many other cities in the world

(4)

“I can

try

before I buy my house…”

1

“…and lower the risk of a bad

purchase”

$

PATRIMONIO CALIDAD DE VIDA BUY/ RENT ¿HOUSE? BUY/ RENT

¿HOUSE? RENTBUY/

Good Bad Good Bad BUY RENT BUY RENT

another Good BUY

Rethinking

the Home

ownership

Paradigm

(5)

“My situation can

change

and I

do not loose my home equity”

2

$

PATRIMONIO $ 123 $ 123 $ 123 $ 123 $ 123 $ 123 BUY/

RENT ¿SITUATION?(FAMILY, JOB)

COMPRO/ RENTO

¿SITUATION? RENTBUY/

Stable Changes Stable Changes BUY RENT BUY RENT

Another Stable BUY

Rethinking

the Home

ownership

Paradigm

(6)

“I can RENT a

better

house while

I can afford to BUY one that

sticks”

3

Difference Outcome over Time: Rent - Buy

SENSITIVITY ANALYSIS TO HOME APPRECIATION OVER TIME

(constant pesos at end date)

5% 1 4% 3% 2% 1% 0% -1% 5% -2% -1% 0% 1% 2% 3% 4%

Appreciation Rate(yearly real rate)

Pe rma ne nci a (a ño s)

Appreciation Rate(yearly real rate) 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Without Mortgage Tax Deduction With Mortgage Tax Deduction

Total Difference (Thousands) RENT BUY RENT BUY

Renting

is

better

when

Home

appreciation

rates

are not very

High

-2%

If house never appraises in real terms

it is better to rentfor at least 20 yrs

Rethinking

the Home

ownership

Paradigm

Club de Rentas® 6

(7)

Age Future Income Expectations St ab ili ty (family /jo b c on dit io n)

Higher than current Same as current Lower than current

18-34 35-50 50+ Low Average Pure Rent High Rent with BuyOption Buy Buy Pure Rent Pure Rent Rent with BuyOption Buy Pure Rent + Equity + E qu ity + Q ualit y o f L iv ng + Quality of Living Stage (age/income) 18-30 31-50 50+ 75% 25%

RENT vs BUY Choice

by Customer Type

Rethinking

the Home

ownership

Paradigm

(8)

Optimal

Stages

:

Buy or Rent

Pure Rent

Rent+

BuyOption

Buy

QUALITY OF LIVING –HOUSE RELATED

SAVINGS/ BUILT EQUITY

$$$ Ages 18 31 36 $ BUY-SELL-BUY BUY-SELL-BUY

Swith home Buy Home

$

Income Salary Real growth +3.3% Age of Household Stabiliity 31 Home Appraisal Real Rate +2%

Extent to

which rent

may assist in

Housing

goals

Pure Rent

PATRIMONIO RENT-BUY-SELL-RENT  Club de Rentas®

ILLUSTRATION

8

(9)

Rental

Housing

supply in

Mexico City

“Institutional” Supply

Fuente: National Multifamily Housing Council and Softec

In México, 70% of Rental Housing supply corresponds to Landlords with 10 o less properties

Only 1% rental housing supply in Mexico City is institutional

<1%

Mexico City

USA

33%

“Individual Landlords” Supply

Only 10% of Landlords pay taxes

% Institutional Rental Housing Supply

(10)

Introducing

Club de Rentas

®

a House Rental Pool Trust that provides income constantly to individual Landlords

In

Club de Rentas

model, individual landlords

delegate their Lease

:

To a professional management company that handles rent

very similarly to lending ops

That gathers rent collection from multiple properties into a

Trust to share revenues and expenses, mitigate risks, and

always provide rental income to their Landlords

That taps into the Tenant’s payroll to collect rent

*

* Tenants who quilify for Arrendavit Program

(11)

¿How much rental income can you earn in 10 years?

$1,085,796

$571,116

On your own In Club de Rentas®

$514,680

In

Club de Rentas

®

you get:

90%

more

Apartment Colonia: Renta: Valor: m2: Edad: Hipoteca: SI NO Extremadura 59 0 $ 2,009,000 $ 12,887 $901,442 before Taxes REN TA L I N COM E SIM U LA TOR

Ingresa los datos de tu Propiedad en:

www.clubderentas.com.mx

para conocer cuánto podrías recibir

Club de Rentas®

(12)

Finally, a few ideas to discuss about…

Rental Pools and REITs as

change agents to develop

a Housing Rental Mkt

• Rental is implicitly a low

rate financing alternative • Fills the gap between low

investment rates and mortgage rates

• Government uses resources efficiently by allowing

private sector to partake • Tap allocated equity locked

in thousands of homes

Closing The Loop:

Landlords and Tenants

may fund REITs

• Separate Homeownership

and RE ownership • Rental w Buy Option

Schemes

• Rental with REIT Investing • Rental with Leveraged REIT

investing

Foster Rental Housing

Institutionalization

(Santa’s List)

• Land Reutilization • Density & Potentiality

Transferring

• Tax regulation and Incentives

• LT Financing for Rental Housing projects

• Fast-Track permitting and non-stop project

development

• Occupancy, delinquency, eviction guarantees

(13)

The first home rental pool trust in latinamerica

    

Club de Rentas

®

Thank you

contacto: IR@retna.com.mx Investor Relations +52 1 55 5989 5570 13

References

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