All Topics / Creative Investing / Wrapping or leasing?

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  • Profile photo of paulbcolemanpaulbcoleman
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    @paulbcoleman
    Join Date: 2004
    Post Count: 4
    May 5, 2004 - 6:53 am

    I have a tenanted property in Vic where the tenants have shown interest in purchasing my property in the near future. The property at present is negatively geared, and I want to improve on my investment. My tenants have limited funds with only a basic level of income, and are self employed. If I wrap it I doubt whether they can afford the repayments. For example my property is worth around 295,000 and I have a 170,000 mortgage with a bank. If they pay me a deposit of say 20,000 they they would have to pay me installments on the remaining balance of say 275,000 which would cost them over 2,000 PI per month over 30 years @ 8% interest. This is a lot more than the $740 they are paying me in rent at present.Is there a more affordable way that works for them and for me so we both have a favourable outcome? I would appreciate anyones advise.
    Regards Paul

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    May 6, 2004 - 1:25 am

    I don’t see there is an easier way for them to do it without you losing out. You could use a lease option and have them pay say $100 pw extra, then have all the extra repayments come off their purchase price – based on market price at the time they want to buy it. eg in two years time it may be worth $350,000, so they could get a $10,400 discount – not much, but maybe they could pay more or you could even offer to match the extra they have paid. ie $20,800 discount on this case.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Profile photo of Kiwi-FullaKiwi-Fulla
    Member
    @kiwi-fulla
    Join Date: 2002
    Post Count: 371
    May 10, 2004 - 11:22 am

    I know that Rick otton is giving a one day lease option workshop this month… I think it is on the 22nd of May…. anybody going? I think it might be on http://www.rickotton.com

    Cheers,
    Kiwi

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429
    May 25, 2004 - 3:56 am

    Paul

    Maybe you could ‘lengthen’ the terms of your loan with them – ie work out repayments over 40 years, but get them to pay more if they can, and work out a time (say 5 years) where they would need to look at cashing you out – or upping the payments…..

    Cheers
    Mel

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