Passive Partnerships (PP) is a co-ownership model where a landlord converts their rental property into a shared arrangement — you buy in as the active owner, they retain a passive stake, and a non-profit manages the contract fairly for both parties.
You can make an offer to buy any home using PP, but right now it only works for a subset of properties. We don't yet have a fund that pre-approves you to go and buy any property for sale (we're working on it). The properties that work today are ones where a landlord wants to convert from being a normal landlord to a Passive Owner, and where they have a relatively low mortgage. By our estimate, roughly 200,000 to 240,000 properties fit that description, compared to about 30,000 properties listed for sale at any time.
Most of these properties won't be on the market, and the landlord won't know the Passive Partnerships option exists. Below are some strategies for finding one.
Properties PP won't work for (currently)
These situations are not currently suitable for Passive Partnerships:
- Someone selling who wants or needs the money from the sale (e.g. to buy another property to live in).
- A property with a large loan (unless you have a large deposit).
- A landlord who loves being hands-on and doesn't want to be passive.
The ideal property
The perfect PP property is one that is currently rented, where the landlord still wants to own a real stake in the property and get capital gain but:
- Doesn't want the hassles of being a landlord.
- Would like to make more money by avoiding high compliance and management costs (typically $5,000–$8,000 per year).
- Would also like to help someone onto the property ladder.
Option 1: you have a 20%+ deposit
There's an interesting opportunity right now — before PP is widely available — to actively find properties that suit you. It takes a little more work than other routes, but here's how to get started:
- Watch our listings. Whenever we have a new property we'll list it — register your interest to hear first.
- Look at homes for sale and actively ask if the owner is interested in converting to being a Passive Owner (see the sample email below).
- Find a rented property you like and approach the owner directly to see if they'd like to convert. Look at current rental listings, or any property that's already tenanted.
- If you know a landlord who's grumbling about the cost, inefficiency and hassle of the current system — they're a perfect candidate.
Option 2: you don't have a large enough deposit yet
Long term, we're keen to offer Passive Partnerships with much lower deposits — say 10%, or even 5%. We think this is possible because of the much lower chance of default. We'll build a track record at higher deposits first, and there will be a requirement to grow your ownership beyond 20% within a relatively short time.
Because the deposit is lower, we'll look more carefully at your financial track record. The main things we consider are:
- No high-interest debt (credit card, car finance, buy now pay later etc.).
- A track record of consistent payments matching what PP would require (e.g. rent plus savings toward a deposit).
- A high credit rating.
What matters most is consistency of payment, the total size, and how long you've kept it up. Our requirements aren't as strict as a bank's, because there's no negative equity or doubling-interest-rate risk — the property can always serve as security. Why default risk is far lower →
Option 3: you know someone who'd like to be the Passive Owner
Some people are lucky enough to know someone who could act as the Passive Owner. The bank of Mum and Dad providing the cash to buy the other part of the property is a common example. If that's you, we accept lower deposits (if your other owner is happy), and you can buy any property the two of you agree on. We'll manage the contract in a clear and fair way.
A common problem with co-ownership arrangements is the constant misalignment of incentives between owners. Passive Partnerships solves this by giving one party all the decisions and the other a fair, easy return — with no opportunities for conflict. Why co-ownership usually goes wrong, and how PP avoids it →
Sample email template
Personalise this before sending it to a landlord or property owner:
Hi [Name],
I'm getting in touch to see if you'd be interested in changing how you own your rental property, so you can:
- Remove all the hassles of being a landlord
- Earn more money (by removing the landlord management and compliance costs)
- Still directly own part of the property and benefit from capital gain
- Help someone like me get a foot on the property ladder
Passive Partnerships is run by a non-profit (the same structure as Simplicity funds) and is designed to work in both parties' interests. You can find out more on their website, or I'd love to have a coffee and chat about how it could work.
Cheers,
[Your name]