NSW Scam? - Affordable Housing Provider offer

To all PMs/ PIs,

My PM forward me this offer after open house inspection. The company is called "AskInvest" Group.

This is my first time coming across this offer (as copied below). To me it sounds like a pretty good deal. But like they say, if it is too good to be true.......

I hope to get people's opinion on whether this is a legit offer to consider. Especially those that has experienced this before in the past.

Cheers,

We'd like to offer $730/week. Lease starting from 26 September on a 12 month lease with the possibilty to extend it to 4 more years.

I’d like to ask to submit our proposal and here are some of the benefits renting to us as opposite to the standard tenant:

• Secure long term without interruption rental income for up to 5 years.
• No loss of income because the property is vacant between tenancies
• No need to spend on re-letting fees and advertising.
• The property is regularly maintained by professional cleaner and gardener.
• In addition to our 4 weeks bond, there is also 4 weeks bond going to be lodged with RBO for each room. 3 times more security.
• All residents are going through the screening process and names checked against TICA database.

As you probably know, there is a shortage in the affordable housing in the area and the lack of appropriate and affordable housing is not only seen in the low socio-demographic sector but is having a huge impact on the middle tier of our community. This is comprised of several groups that include young professionals like doctors and nurses, accountants and lawyers who are just starting out, all the way through to the largest growing demographic at risk being women 50 years plus.

We’re seeking properties that can be used to house these people giving them a secure, safe, clean and affordable home to live.

Of course, not all available properties for rent are suitable, which is why we are very discerning about who we partner with as well as the features of the property. In return, we offer a multitude of benefits to the owner to create a mutually beneficial outcome.

Being property investors, we understand the necessity of having our assets continue a positive return and increase in value. But the greatest return we have is in knowing that we are providing accommodation of an appropriate standard to those in need.

Some of the many benefits to the landlord/investor consist of the following:

Double Management – In addition to you, the principal Agency our own Property Manager conducts regular (fortnightly) inspections of the property. All applicants go through a multi-tier screening process prior to the standard application process of a TICA, reference, income and identification check.

House Rules - Because our focus is on creating harmonious households, all interested applicants are advised of, and must agree to, the comprehensive House Rules. On the very rare occasion we have a resident that isn’t fully co-operative, we have a much greater flexibility to remove them.

Security of Income – Our preference is to have an extended lease of a 1x1x1x1x1 period. Each property that we manage we like to have a minimum 12-month term to provide secure tenure. After this period, we seek the option to extend if the arrangement is satisfactory to both the owners and ourselves. This gives the owner the security of income as we take full responsibility for the rental payments.

Cleaning – As part of our agreement, we engage professional cleaners to attend to the shared areas of the house, and a Spring Clean is conducted at regular intervals. This gives additional access to monitor the property.

Maintenance – The yard and gardens are maintained on a regular basis by professional contractors that we also engage at our expense.

Double Security Bond – The full property bond is paid upfront by us, and in addition, each occupant also pays a security deposit which is held by the RBO.

Fire Safety Installation – We engage our licensed tradespeople to supply and Install all the updated fire safety systems. This includes linked smoke detectors, exit plans, safety blanket and fire extinguisher as well as updated egress door hardware. We believe the safety of the property and it’s residents are the priority.

We understand that this is a very unusual concept and are more than happy to answer any questions that may arise.

 

Not a scam but of course something you need to investigate.

There are plenty of people that are making a business of renting an entire house then renting it out room by room. Some are extremely professional set ups, some are just DIY people. It's similar in vein to the Small is the New Big and HMO (Houses of Multiple Occupancy) type projects. There is no need for people to actually own to get do these projects as they can do it with permission on a rental too.

Depending on the numbers the house may become classified as a Boarding House and you will need to carefully consider your insurance options, who will get council permission etc etc

 

Unlikely to be a scam however you will need to check with your insurer if they cover sublet properties as most don't (Terri Scheer do) and although it sounds great in reality if the company leasing the property is dissolved you may end up with quite a mess.

I would ask your property manager to ask this particular company to provide details of other current property managers that look after properties they lease to gain references.

 

There would be no neighbours complaints if you didn't live next door to your investment

 

The concept of headleasing isn't new, and I find it's generally a great experience. This setup seems especially fantastic though... the spiel seems like a sales job, so I'd like to see more information if I were you to cut to the real facts.

 

So, in the poll, that would be a "Yes"?

 

So, when "AskInvest", your new tenant signs the NSW Tenancy Agreement, what happens with the bit about subletting, assuming you don't provide your permission in writing?

In the Security of Income part of the email, what is "their" (and you should be aware that this doesn't mean "your") definition of "full responsibility for the rental payments"? And what is your recourse, if they just decide to stop paying? Are you an unsecured creditor? Does their tenancy fall under the Covid19 non-eviction guidelines, whilst still accepting payments from their own tenants? And are they protected by the expanded Covid19 insolvency provisions should some unexpected ugliness occur?

And the sublet tenants Security Bond seemingly implies that it might be there for you, but doesn't say that at all.

What does your insurer think about this transformation to a seeming boarding house, and will they cover ad hoc public liability for possible transient tenants? And are you in a NSW strata? If so, how does your strata committee and owner's corp feel about your sub-let opportunity? Not to mention the offered "Fire Safety Installation", and your responsibility to cover damage to common property...

Anyway, I would that the most desirable outcome, in light of the above, would be that the rent is doubled, to compensate you for the risk.

I hope it works out for you though...

 

the only group I can find is this

About us – ASK Invest Group
They seem to be property developers though