Hi everybody,
I purchased a property in the Hunter Valley back in 2009. Got it for a reasonable price of 205K. Was getting 270 pw rent from day dot which has increased to 295 pw currently. So the property has been slightly negative but I like to call it neutral. But got it valued recently and one valuation came in at 250-260k and the second at 230-240k
I got some photos of the house recently after a rent inspection and couldnt believe the state of the place. Not because the tenants have trashed it, just because it is old and needs some work. The bathroom was absolutely disgusting and I cant believe the tenants dont complain about it.
Anyway, the tenants I have in there now have been there for 3 years and want to sign a long term lease of 3-5 years. The house is looking old and I believe repairs are going to become more and more frequent. I dont want to have to spend any money on it to sell it. So I have suggested to them about buying the house and I will finance the deal. They seem interested but are waiting for me to submit some figures.
So my questions are; What are the different ways I could do this? I was just thinking about selling them the house for a purchase price somewhere in the middle of the 2 valuations and adding 2% to my current interest rate and that will be their interest rate. Seems simple to me but after reading a lot of the other post in the creative forum I think there is more to it than meets the eye.
Any comments/suggestions welcome
Corie
Hi Corie
Like everything, if you say it quickly it sounds easy
but there's always more to it than meets the eye. This doesn't mean it's difficult, just that there are a few new things to learn and keep an eye on.The three most popular techniques for selling a property with vendor finance (VF) are Rent To Own, Instalment Contract and Deposit Finance.
One of our businesses, negative2positive helps owners sell their properties with VF. While http://www.negative2positive.com.au is a website to promote this service, it's also a good place to get some basic information about what's involved.
We also put out a regular negative2positive newsletter that's designed to help people having a go at the technique themselves. It's designed to make sure you stay within all the rules that surround VF. Just submit your details on the home page and the system will send through your first newsletter.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi Paul,
I had a look at your site and was reading about the Installment contract technique. Can you tell me how this differs from the rent to own and what are the pros and cons of this technique?
Hi Corie
A couple of great url's that explain the differences between Rent To Owns (Lease/Options) and Instalment Contracts (IC) are:
https://www.propertyinvesting.com/strategies/lease-options and
https://www.propertyinvesting.com/strategies/wraps
I tend to prefer the IC as it is a real Contract of Sale and and all State governments, except SA, pay the FHOG to eligible purchasers buying with an IC.
However our various States have different rules for when Stamp duty is payable and these differences tend to make one or the other technique more popular in different States.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
but there's always more to it than meets the eye. This doesn't mean it's difficult, just that there are a few new things to learn and keep an eye on.You must be logged in to reply to this topic. If you don't have an account, you can register here.
