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Rent-to-own as IP

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

  1. JohnPropChat

    JohnPropChat Well-Known Member

    Joined:
    10th Sep, 2015
    Posts:
    567
    Location:
    Perth
    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?
     
  2. Ethan

    Ethan New Member

    Joined:
    25th Nov, 2015
    Posts:
    4
    Location:
    Australia
    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
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,039
    Location:
    Sydney
    1. In theory yes
    2. complex
    3. many.