Financial planning for those who will buy property in consortium

Buying the first property is often an important step in people’s lives, and besides being a dream come true, it is also a great investment. There are several ways in which you can buy a property: from cash purchase to real estate financing. However, it is a third alternative, the consortium, which is increasingly conquering potential buyers.

Purchasing through consortiums has a very popular programmed purchase alternative among the Brazilian public, especially for those who wish to purchase real estate at a lower cost and have better payment and planning possibilities.

However, to participate in a consortium, it is essential to financial planning and properly organize your budget. Interested in learning more about it? Continue reading our post!

The operation of the real estate consorted

home loan

The real estate consortium is a type of financing, typically Brazilian, created to facilitate the payment of those who want to purchase some property. It works as follows: A financial institution, which is the consortium administrator, brings together a number of people who have the common goal of buying the same good – an apartment, for example.

These people organize to buy real estate joints for all members of the group. Payments are divided into installments paid monthly. Thus, each month, the money paid by all participants is collected and used so that at least one person in the group can make the acquisition.

The choice of this person to be contemplated with the property is made every month, through a draw among all the consortium members who are up to date with the payment. That is, you contribute a monthly amount for your parcel and receive a letter of credit to buy your property when it is drawn.

It is a process that can take time, because to have the right to receive property requires luck, but if the person does not want to depend on it, there is another option. She may bid and if this is the winner the quota is contemplated and the customer can anticipate the receipt of your letter of credit.

The Advantages of Real Estate Consortium

property loan

The consortium differs from other financing modalities, precisely because it has characteristics that make the negotiation much more advantageous for clients. Are they:

Most economical solution

In the consortium, the installation is cheaper than in ordinary financing, in addition to the absence of interest charges, IOF, and the payment of an entry fee. The only costs are an administrative fee, insurance and reserve fund, all diluted throughout the payment period. For example, a 20% management fee on a 180-month consortium will represent only 0.1111% per month.


financial flexibility

There are several types of real estate consortium, with plans of varying terms and credits. There is also the possibility to anticipate, reduce or even pay off the installments at any time. In addition, the use of FGTS for payment and settlement of installments is permitted.


loan safety

The Brazilian consortium system is regulated by the Great North Bank of Brazil and has its own law regulating its activities, ensuring safety and reliability for its participants.

Planned Purchase

Buyers interested in a consortium have the opportunity to program themselves by purchasing goods and hiring services according to their needs and ability to pay.

A consortium can be considered as a forced savings, this can help the buyer better understand the importance of saving to achieve goals by turning saving into a habit.

The Importance Of Financial Planning To Acquire A Consortium

credit loan

Consortia are certainly an attractive alternative for those considering buying a property. But before choosing this option, the person concerned must plan carefully. The fact that no interest is charged does not mean that the costs involved in a consortium of not deserve attention. Depending on how installments and fees are charged, the amounts to be paid may indeed be raised to your pocket and this requires caution.

One situation that should be considered is the ability to pay benefits. Delaying payment of installments will entail difficulties for participants, so it should be avoided at all costs. Letting the installments accumulate can create a real flood of late fees and interest.

In addition, when a participant is in default, he or she will no longer be able to participate in sweepstakes or bid for letters of credit. On the other hand, if he has already been contemplated, his contemplation may be canceled by the administrator. If you are already in possession of the property, you can also perform the guarantees agreed in the contract, in addition to collecting fines and interest.

That is, the dream of acquiring your property can become a nightmare, because the consortium, besides seeing your debt grow, can end without your property. It is therefore essential that before closing a consortium contract you from the math to see if the benefits can really fit your budget without any difficulty.

Tips on How to Do Financial Planning for a Real Estate Consortium

financial plan

There are some tips for efficient financial planning, check them out below!

  • Do not enter the consortium by impulse or rod. Plan and better evaluate all your alternatives, and if possible, wait for the best time.
  • Set up a monthly financial plan and plan to make your payments on time. Make every effort not to delay your installments. 
  • Save at least 25% of the value of the property, so you can bid and get a letter of credit without having to rely on luck.
  • Make sure that everything agreed is defined in the consortium contract. Please read the terms of the agreement carefully and take any questions regarding fees and payment terms. 
  • Check what is the number of quota holders, consortium term, letter of credit amount, costs of membership fees, administration and reserve fund.
  • Study how the bidding system works and all the rules of the draw.
  • Be sure to attend meetings and stay informed about the progress of the consortium.

If used well, real estate consortium is a great option!

The best way to achieve your dreams is to prepare well. Choosing the right way to reach your goals is more than essential. For those planning and thinking ahead, the consortium is a great alternative to buying a property. Download our eBook to learn all about real estate syndication!

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