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crudeFool

Sell To Rent Back

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Hi

My mother has been thinking about selling her property and renting for a couple of years now, but is reluctant as she likes where she lives. She saw an advert from a finance company, who will buy your house from you and take you on as a tenant. This sounds perfect for my mother, but also sounds too good to be true.

Anyone ever come across these schemes and know the pros and cons?

(there was an earlier thread in the forums, but it didn't go into much detail)

Regards,

crude

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If she does that she could get kicked out. It might be worth looking at some sort of equity release scheme but I seem to remember reading something about them being very expensive.

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Hi

My mother has been thinking about selling her property and renting for a couple of years now, but is reluctant as she likes where she lives. She saw an advert from a finance company, who will buy your house from you and take you on as a tenant. This sounds perfect for my mother, but also sounds too good to be true.

Anyone ever come across these schemes and know the pros and cons?

(there was an earlier thread in the forums, but it didn't go into much detail)

Regards,

crude

Hi Crude,

I'm not sure who the finance company are but this is one of the main strategies of the BMV crowd over at Singing Pig - they try to find people in financially tough circumstances and offer to buy and rent back the property (with a buy-back option). The catch is they will offer 25-30% below market value. If you want to see their side of this look at the BMV Marketing thread at SingingPig.com

Even if it's a reputable finance company (is there such a thing) it is likely that the deal only makes sense for them if they can do it at a cheap purchase price. There might be someone out there for whom it would make sense to buy the property at current market value and rent it back at a fair rate, so I wouldn't say it's an impossible idea, but be very suspicious of companies like this and of all the small print etc (I tend to imagine their long term aim may also be to get the tenant out...)

Why does she want to sell. Is it a STR decision? If she's already made some money on house prices going up and she really likes the house, maybe it would make sense to just sit tight? But I can't really comment as I don't know the circumstances.

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I did this for my parents. Bought off their mortage(about 50%) equity and they live there rent free now and I own the place. Only issue is that you are tying up the cash for an unknown time as you need a lifetime rent agreement which obviously means the house is never yours until they die. I know a family who did it for their parents between them all buying a share.

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I have a friend who is doing this. She's selling to a private seller though.

As others have said it's all about getting the property for bellow market value. If you could get a private seller to do this then it might be worth a go but doing so through a company she won't get what the house is currently worth.

If she has equity to spare and want's to downsize it might be a decent deal but if not I don't think it's worth it.

When you say she likes where she is how small a definition is that, is it the house, the street or the town. Until you start looking you don't realise how many rental properties there are around, there may be a similar property close by for rent.

Worst case scenario get them round and see what they offer that then gives you an indication of where the price level stands you can then compare this with the going rate and pitch it somewhere in between.

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Worst case scenario get them round and see what they offer that then gives you an indication of where the price level stands you can then compare this with the going rate and pitch it somewhere in between.

That's what we're going to do - I'll post the results on this thread at a later date.

Many thanks for the replies

crude

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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