Hi all,
Wondering if anyone can point me in the right direction. We have a property that is a rental but not ideal (acreage, high maintenance) and rent/tax benefits (negative geared) cover interest and most costs so not gaining on principle. Had it on the market at $498k for over a year, dropped to $480k and now have very keen buyer ex Europe. They have $400k but want to keep $150-200k aside to start a business.
Obviously banks won't touch them since they have no jobs or history here so they want vendor finance. The property is heavily geared with $375k owing on it so thought the best route might be Rent to Buy with us leasing them the property and selling them an option to purchase but given they would be prepared to give us a $200k+ deposit not sure if this suits. All the information I can find on the internet appears to be regarding low/no deposit purchasers or information that is largely aimed at the purchaser rather than vendor.
Can't see an Installment set up working as we don't have access to funds that would finance a property we would not then have title to as our own home is similarly geared around 80% of a similar value. Be a shame to have to turn away someone with that access to capital… any ideas?
Thanks in advance
John (TAS)
Hi John
A Lease/Option (Rent To Buy) could work well in this situation. When you say 'they would be prepared to give us a $200k+ deposit not sure if this suits', would you mind outlining why this may not suit?
Also, if you were to use an Instalment Contract the Title remains in your name until the vendor finance buyers complete the sale, i.e. pay all the Instalments or find another way of paying you out what they owe you.
If you could let us know what you're trying to achieve by selling the property, we should be able to get back to you with some clearer ideas, vendor finance or not.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Like previously suggested Rent To Buy would be the perfect option. The property would remaing yours until your buyer pays you the remaining balance.
Hi John
On reading your post again and looking at the Rent To Own idea, I believe you would need to satisfy yourself that:
- These overseas buyers are for real – I've had some obvious overseas (Nigerian type) scammers respond to a couple of my VF ads
- Establish the income stream these VF buyers plan to use to service the rent and any on-going option fee
- Establish if these overseas buyers will have the necessary visas to be able to buy the property at the end of the option term
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi John
I would have thought Private Finance may have been an option.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Sorry re-reading your post i believe it could be done with a conventional lender.
The loan would be tied into the anticipated rent of the subject property.
I am doing a similar deal for a client here in Brisbane where his wife is buying the property and has no income at all.
Both live overseas and he earns all the money.
Loan has been approved on the basis the repayments = net rental income.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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