Hi all, im putting together my first wrap deal and would like to know how the rates are handled.
For example do you just leave them for the wrappee to pay when they come in or do you pay them and then try and get the money from the wrappee or do you add the cost of the rates into the wrappees loan payments ? The third option sounds best to me but it does up the payments which can look a little high when finding potential buyers. Any feed back is greatly appreciated
Regards RiskyIf you want the rainbow youve got to put up with the rain!
I would suggest you pay them yourself and collect the money from you wrappee. I found out the hard way that they often just ignore bills like these.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry
As always bang on. If they don’t get paid you as the legal owner of the property are liable.
I would suggest that you incorporate a clause in your Standard Installment Contract to divide the rates by say 12 and collect an even amount each month from your wrappee.
Bear in mind you can always do the adjustments up at the end of the year but at least the purchaser has something to budget on.
Cheers Richard
richard at fhog.com.au
http://www.fhog.com.auThere is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
Hi Risky
All our wrappees pay an extra $30 per week and aren’t bothered by bills, i.e. we pay the council rates, water rates and building insurance. They love it. At the end of the years we do a “wash up”. If they owe us money we collect it and if we owe them money we can send them a cheque or take it off their loan balance.
We sell the concept to them on the basis of, “gee, we wish we could spread all the bills throughout the year into a weekly payment”. And as people have already mentioned, you definitely don’t want any nasty surprises in relation to unpaid rates and insurance.
We operate in NSW and this concept has been incorporated into our Installment Contract by our solicitor.
I hope this helps.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
I actually have a court judgement on my CRAA because of this. The council was sending the rates notices to the wrappee who was ingnoring them. The council eventually too it to court and put the judgement on. I immediately paid it ($500), but it still hurts when getting finance. All this happend on the first wrap I did about 4 years ago, and I have learned a few things since then.
I think there is a chinses saying, something like this:
“Only a fool learns from his own mistakes, a wise person learns from the mistakes of others.”Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanx guys for your replies, i like the idea of adding the yearly rate costs into the weekly premiums. I also like the idea of having a clause into the contract to that effect which hopefully would solve any later differences. Just ran a advertisment for my first wrap deal , because one of my IPs has just become untennanted so good time to feel the waters to see what sort of interest is here in the West.
Regards Risky
If you want the rainbow youve got to put up with the rain!
You must be logged in to reply to this topic. If you don't have an account, you can register here.
