Rent to buy

Discussion in 'Innovative Property Investment Techniques' started by Cimbom, 11th Oct, 2015.

Join Australia's most dynamic and respected property investment community
  1. melbournian

    melbournian Well-Known Member

    Joined:
    2nd Sep, 2015
    Posts:
    3,038
    Location:
    melbourne
    @Terry_w can't u have a longer than normal settlement and the just slowly collect rent that forms the initial 10% deposit. In the event the tenant can't settle or does a runner u keep the deposit anyway.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,667
    Location:
    Australia wide
    You could. But why not just wait and enter into a contract when they do have the 10%?
     
  3. melbournian

    melbournian Well-Known Member

    Joined:
    2nd Sep, 2015
    Posts:
    3,038
    Location:
    melbourne
    The presentation with tenants is not really that great hence Yeah better to lock them in now if they're interested so I don't have to think abt it and I don't have to pay agent fees to list it. With this tenant u gotto hold her hand through the process
     
  4. Ethan

    Ethan New Member

    Joined:
    25th Nov, 2015
    Posts:
    4
    Location:
    Australia
    I found that for many people it's easier to save when they are 'forced' to than just relying on sheer will power.

    So, when a tenant/buyer goes into an agreement that s/he knows s/he HAS to save up to 10% equity within X years and s/he has to do their very best to become eligible for a loan within X years, it's a real motivation. Plus, the purchase price is locked in, all info is known and they are not chasing the 'ever appreciating' (long term speaking) property prices.
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,667
    Location:
    Australia wide
    But what is the advantage to the seller?

    Locking in price if values dropping and keeping option fee if the puchase cant complete.
     
  6. melbournian

    melbournian Well-Known Member

    Joined:
    2nd Sep, 2015
    Posts:
    3,038
    Location:
    melbourne
    well i think for e.g. i have a really messy tenant (which is her right as long as nothing is damaged). to sell it for good price, really need it vacant (hence lost of rental) or lots of mucking around from place being rented to sale time and settlement. if the purchaser wants vacant possession that would be around another 60 days. Price i am asking is slightly higher too and i don't pay agent fees and i lock in rental with less headaches. Deposit stays in my account reducing interest on other loans too. and is only 8 odd months wait anyway.
     
    Ethan likes this.