Rent-to-own as IP

Discussion in 'Innovative Property Investment Techniques' started by JohnPropChat, 29th Sep, 2015.

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  1. JohnPropChat

    JohnPropChat Well-Known Member

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    Let's say I find a motivated vendor that agrees to a rent-to-own scheme. I want to on-lease the entire house to someone else so that I don't have to live in it and when my finances pick-up I can buy it off the vendor.

    1) Do schemes like this work in a down market such as Perth?
    2) Since I won't own the property - what are the tax implications?
    3) Legal implications?
     
    JohnPropChat, 29th Sep, 2015
    #1
  2. Ethan

    Ethan New Member

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    Hi John,

    Happy to help :)

    Sounds like a great idea! Good luck! :)

    Believe they actually work best in down markets ;-)

    If their rent only covers your rent (i.e. no gain for you), then I don't think there should be a tax issue at this point but I am no accountant so best to check.

    I can only think of making sure the vendor agrees for you to sublet the house and the tenants knowing that you're subletting (and allowed to do so).

    Hope this helps?

    Cheers,
    Ethan
     
    Ethan, 25th Nov, 2015
    #2
  3. Terry_w

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

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    1. In theory yes
    2. complex
    3. many.
     
    Terry_w, 25th Nov, 2015
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