Hi All
Advice would be greatly appreciated.
I have a 3 BR house in Country Victoria (Morwell) which I bought 18 months ago for $103K. I could realistically sell it today for between $125K and $130 by the standard way using a realestate agent.
The property has 82K debt and currently rents for $160 per week but could rent for up to $170.
Using Rick Otton's manual, this is the deal I am going to offer to the market. (Have only known that lease options exsist for 3 weeks)
2 year lease option
Deposit: 3 to 5K
Rent: $160 per week
Ongoing Option fee: $50 per week.
Total Income 160 plus 50 is $210 per week and credit the $50 per week of the total purchase price over the 2 year period if they decide to buy
Purchase price: 150K
So lets just say after a 2 year period they decide to buy, then I would minus the deposit ($3 – $5K) and the $50 per week ($5200) off the purchase price of $150K
Is this a fair deal? IS the rent and the pruchase price fair to me and the buyers?
Would be very keen to hear from anyone who has lease option experience or knowledge.
Thanks
I believe with lease options now – a tenant/buyer must pay stamp duty up front. So that is one thing you must consider for the tenant/buyer.
Unless some one who has experienced in this Lease Option area – how do you work with this stamp duty issue?
Hi All
Yes, unfortunately Victoria now charges full stamp duty on the Strike Price of the Option. This luckily is not the case, so far, in other States & Territories.
It looks like most vendor finance transactions in Victoria, from here on in, will probably be undertaken with Instalment Contracts. At least the Instalment Contract attracts payment of the FHOG (if applicable) and removes your Land Tax liability on that property.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi daba373
You have made a great point. After talking with Paul (Above comment) and a lawyer from victoria they confirm what you have said regarding stamp duty. This makes it a lot less attractive and the use of an installment contracts seems like a much better option in Victoria.would like to hear of anyone who has used the Rick Otton Massive Passive educational pack and what thier thoughts on it were?? Worth 5 G?
Thanks
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