What's so great about win a house raffles

04 May 2009
Posted in Organizing House Raffles

Who doesn't dream of winning a house someday, for the price of a restaurant meal? While house raffles are not new and have been run by charities around the world for a number of years, recently with the sharp slowdown in the property market we're seeing a rise in homeowners turning to raffles and competitions to "sell" their home.

In today's economic environment, the benefits of running a house raffle seem pretty clear. If structured properly, one can in theory sell enough tickets to give away a property prize. Rather than having to find buyers that are able to pay the full price, the raffle organizer is required to find a large number of players willing to buy a ticket. If all goes well, the ownership of the house is transferred to the winner and all costs can be covered.

In most states across the US, there is a clear distinction between house raffles run on behalf of a charity or non-profit organization, versus those that are run for private gain. The latter are usually considered to be illegal, therefore it is strongly recommended to check the law in your state before running one yourself. Likewise, in other countries we understand that there is a distinction between lotteries or games of chance featuring a property as a top prize, versus skill-based competitions. Depending on the country or state, it may be possible to run a prize competition (rather than a pure raffle) to give away a property, as long as there is a clear element of skill and judgement.

Generally in the USA house raffles are therefore usually organized by registered charities. If all goes well and the targeted number of ticket sales is reached, this allows the homeowner to pay off their debt. The charity retains all profits earned from the raffle, which can be considerable if it is successful. Of course, this does rely on the ability to sell sufficient tickets in the raffle to be able to give away the property prize and recover the various costs involved (such as legal, marketing and website development and design expenses).

From a player's perspective, entering a house raffle can be very appealing. Winning a million-dollar home for a handful of dollars while helping support a charity you feel passionate about is a great concept. Of course, it is important to pick the best raffle for you: one that features a home in a location you are interested in (or where you think there is a rental potential), while offering attractive odds of winning at an entry price you can afford. While some house raffles offer a fixed number of tickets, others don't limit how many raffle tickets can be sold over the period.

Another consideration is that in most states, the property winner may be required to pay tax on their winnings. This can be based on the difference between the value of the property and the price of the raffle ticket paid. Depending on the value of the property, this could represent a large sum of money and most people may have to raise a mortgage on their new prize home to afford to keep it. Of course, many raffles also give winners the choice of a cash prize instead of the house itself. While the cash prize is usually worth less than the value of the top property prize, this can still represent a considerable amount of money.

Regardless how you look at it, a successful house raffle can be a great way for players, homeowners and charities alike to find what they are looking for. In the right circumstances, it can be a "win-win" situation, which explains why so many win a house raffles are currently being organized across the USA and beyond.

Add Your Own Comment