I have been looking into lease-back options for display homes in various areas as possible investment properties and am finding that 7-9% returns, fixed for 2 years or more are not uncommon.
Is someone able to help with finding out – WHATS THE CATCH??? Why is it that these properties can effectively be rented $100-150 p/w more than similar properties in the area, without the risk of vacancy in the first 2 years?
They say if it seems too good to be true, it probably is…This seems the case here and keen to hear any thoughts or experience with these.
Yes.. the catch is after 2 years.. you rent = 4-5%.. (i.e. back to market)
The purchase price might be inflated…As GOM said make sure the propoerty values up and that the rent is at least market rent now and in the future.
Paying $20K over and above the odds for a property means the vendor can pay a lot of rent subsidy over the next couple of years.
Richard Taylor | Australia's leading private lender
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