I’ve noticed alot of literature based on lease options in property. I’ve noticed there are some very handy advavtages regarding exposure monetarily. As I am serious about getting ahead financially, this is something I’m considering. Any comments? Any experience?
G’day Alexander…
An option to buy can be an excellent vehicle to control property with very little money.Great in a rising market.
Personally, I would see an opportunity to rent with an option to purchase two years down the track. Provided that the agreed Purchase Price was an average of 2 Independent Valuations.
The market could be down 10-20% by then.Cheers
Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]Thanks Bill, that’s kind of what we’re looking at. We have considered that we may be able to onsell the option for a profit depending on whether the property is able to be developed on etc. What we’ve found to be hard, is the actual contacting people who own the property because we locate the properties via rental promotions. Is there an easy way to locate the owners of a rental property??[?]
Go ask the local council. They will probably tell you!
yeah, I think there’s a fee for any information gained through the council based on property owners. So this becomes hard when you’re after a hundred diferent details. I’m wondering if there are cheaper ways, like a membership through RPData, or something similar??
This strategy is something I am currently trying to make happen. I was inspired by reading Andrew Grays ebook from creativerealestateinvesting.com.au
I am being fairly selective choosing which properties to target, all properties are in need of some renovation, and in particular, I am only contacting owners whose rental properties have been vacant on the market for more than a month, especially if they have been dropping the rental price over this time (and still can’t find a tenant).
In fact I am currently writing software that makes the internet search process much easier and less time consuming. One of the features of the program is tracking price changes over time for internet listed properties.
So far I have contacted 3 owners. The first one replied to my letter and did not say no outright, so I increased my offer a couple of times and in the end they said not interested.
The second one did not reply to my letter.
The third owner was interested but in the end was too scared to proceed because they “never heard of this before”. The real estate agent was also involved in this negotiation, and after some initial convincing, was keen to help make the deal happen (for some commission). The owner ended up leasing the property at $80/week less than they really wanted, and $180/week less than my offer (considering $100 week equity/deposit accumulation per week).
Anyway, I feel it’s a strategy worth persuing, and hopefully it’s one of those cases where persistence will pay off.
To find the owner of a property, I do a title search.
There are a few websites that let you do title searches. The one I use is Citec.
Citec let you do a title search for pretty much all the states (the Land Search feature lets you search for a Title)
http://www.confirm.citec.com.au/property.htm
Cost is approx $22 per title search
You get the owners Address but not phone number (can look this up at whitepages.com.au so long as they dont have an unlisted phone number)
Here are some example property title searches (with the names and addresses changed for privacy reasons).
Property Title Search Example #1
http://www.rese.com/realestate/ExampleTitleSearch.htmProperty Title Search Example #2
http://www.rese.com/realestate/ExampleTitleSearch2.htmThese pages were obtained from the Citec LANDATA database, and were saved by doing a File->Save from Internet Explorer
Good luck!
MM
http://www.rese.com
(The Australian) Real Estate Search EngineThanks for the reply to this topic mmerlin. I’d like to hear mor about your software which you’re using in conjunction with the internet, based on the change in rental price over a certain period of time. I’m doing the same thing with my friend. What I’ve found is that we have a couple of different steps we have to go thorugh before we can even make a call to the owner. First is sourcing the right address to the rented property if it’s not registered on the net, which we do sometimes just by contacting the agents. Then we locate the address of the owner of the property via an internet engine, then we place the call yto the owner. You mentioned that you’ve had a problem before with the owner backing out due to lack of knowledge of the options idea. I don’t think you have to let the person worry about that side of things until the paperwork comes about. My friend and I base our call as people in the rental market who are looking to purchase down the track…. As you say I think it will be trial and error for a little while, what we’re trying to do is shorten our work load sifting through the potentials. I’d like to hear more about your software, I think that sounds like a great idea.[^] [^]
Hi MM
Thanks for the web site info …..
appreciatedRegards
Wes
I’d like to hear more about your software, I think that sounds like a great idea.Essentially how the program works is:
– you create some “searches” eg search type (rental or sale), suburb(s), price range, number of bedrooms, property type
– the program goes out to the internet and pulls in the text information into a database so you can filter and sort the results.
– this makes it quite easy (click one button) to run all the searches you have defined (with their different criteria), and subsequently, you can view the results and see which properties are newly listed since the last time the program was run.
– it keeps a history so if the listed price changes, the property is flagged as being “new” today, so when you filter the results to view todays new results, you also see the properties that have had a price change today (along with the previous prices it was listed at).
This lets me see rental price drops. The largest price drop in the suburbs I am looking in is currently $750 a week down to $530 a week and it’s still not leased yet. These are the kinds of properties I am targeting for the lease option strategy mentioned above (assuming it’s meets other criteria also
– currently the program works with realestate.com.au
I am going to make it index several more realestate sites and I have begun documenting a few more like realestateview.com.au property.com.au etcAnyway, it’s 70% on it’s way to completion for public beta testing (searching realestate.com.au only). Sign up at http://www.rese.com if you are interested in giving it a spin when it’s ready to go. I’m looking forward to getting some feedback and ideas on different ways people want to use this data.
MM
http://www.rese.com
(The Australian) Real Estate Search EngineLease with option to buy is very common in comercial real estate. I havent ever done it but I know some small business owners that have done this successfully and I was thinking that this might ease the “never heard of that before” syndrome. Also, maybe some comercial real estate agents can give advise as to how this works best/what to look out for etc.
my 2 cents [:0)]
What the mind of man can conceive and believe, it can achieve.
MM, sounds like a really good piece of software…. Looking forward to checking it out, I’ll get rgistered on that site today. I think your idea would really narrow your target market and make it quite a lot easier to pick your propeties more effectively. [^]
Riff- I’ve heard of businesses who do it as well, I have a friend who owns a franchised Cake store who lease options places with the guarantee that the premium price will be met from the rent and revenue generated by the shop. this might be something I look at further down the track..
Thanks for the info guys…[][]Anybody ever completed a successful lease option, either as an intermediary ao as the final buyer[?][?]
How’s your work going MMmerlin??
I have done a few where I sold options. It works better the other way around though- when you are buying options.
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
I’m looking at that type of option right now, instead of selling a currently owned property, I’m trying to source a rental property to organise a lease option on.
We’ve run into some slight problems, though learning really quickly
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