Hi everyone,
I attended a seminar recently where the chap spoke about equity leases. He didn’t go into specifics, so I was wondering if anyone has heard of these and if so, where can I find info about them? (I’m in Sydney, so local info would help). He basically explained it thus: a tenant signs on for a 5 year lease, pays enough to cover your mortgage/expenses, looks after the place and agrees to paint and re-carpet upon moving out in 5 years. YOU give them eg. 20-30% equity of the capital growth at the end of the 5 years. They get to save and have a secure place to live for 5 years, YOU get a constant GOOD tenant, no vacancies/damage etc and get to keep the house and 70% of the capital growth. Sounds good huh? Any info would be appreciated. Thanks. [
]Hey,
Eqtuiy Lease concept is a good one but I think it can only be used for area with high rental returns..Assume your place is worth $350K .. which means ur borrowing $315K from the bank .. at 6% interest rate you should be paying back $363.5 week interest only.
In Sydney a 350K apartment would be rented for around the $260 mark i think and hence your asking the tenant to pay an extra $100 a week(and thats just mortgage not expenses) => $5,200 a year. Which means you have to convince the tenants that the aparment will grow more than $26,000 anuually ($5,200 representing 20%) for the next 5 years !! …
I dunno but if I was a tenant paying $360 a week in an aprtment that is worth $260 for 5 years I would expect a large return back for it
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