It is common when someone takes on the ownership of an average London property; let’s say costing more than 350,000, you should have at least a 70,500 for the deposit plus 10,500 in stamp duty. All this stuff needs not to be shouldered because you can avoid all the normal ownerships cost through rent-to-buy.
People do a Rent-to-Buy to ease the headaches that normally have to incur in order to purchase properties. They get control of a property and do things with it, can renovate it, to increase it’s value and do whatever you need to do before having eventual ownership of it if chooses too. While doing all such things, they’re not incurring all the normal ownership costs. All those owners’ responsibilities are no longer with you; they are with the seller who still owns the property.
Doing Rent-to-Buy is like trying out things before you go buy it. Let’s say for example expensive women’s shoes, imagine if you could go to the shoe shop, and rent the shoes for a while and if you liked them, you could pay for them, but if you didn’t you could hand them back. It would really be benefiting, who would like to pay a lot of money on an expensive pair of shoes that after a few weeks kill your feet?
That’s what happens with rent to buy. It enables you to get it, and try a house on or try a property on, decide if you like it, and if you do, you keep it, and if you don’t you can hand it back. It gives you the choice to, but not the obligation, to take it if you don’t want to. You only get to own the property when you decide to commit and buy the property, because under a Rent-to-Buy, you’re only controlling it, you don’t own it.
Trial period
When you get a Rent-to-Buy, it will have a trial period; it could be one year, six years, and two years, six months, three months. Rent to buy, the parameters within it can be all over the shop. The Buyer and the Seller makes the parameters and it has to be an agreement with both parties. You can haggle and negotiate with what the seller is offering which eventually is mutually beneficial for both.
The interesting thing about Rent-to-Buy agreements is that they’re never the same. If you got fifty people into a room to do Rent-to-Buy agreements, none of them could agree on which was the best way to do them, because Rent-to-Buy agreements all have variants and all of the variants will depend of the buyer and the seller. It’s a mutual understanding of how things are.
Profit
Quite often what you’ll find is many people use Rent to Buy for making profit from the property. You reside there for a period of time, live in it for five or six years and when you move out. You may, through the assignment of the Rent-to-Buy, can give this opportunity to somebody else, and charge them a premium, and then they can elect to take ownership of the property or sell the house and go to make some profit out of it.
A couple of other great ideas you can do is quite often you might want to get a property on a Rent-to-Buy and you can do a joint venture with the owner of the house, so that you might move into the Rent-to-Buy and actually pay no money, and you might get in there on the Rent-to-Buy and, over a period of time, just do some work to his house, renovate his house, in return for paying no money you can split the profits for the increased value that you’ve added to the person’s house. Which is absolutely fantastic? Contractors seem to do this a lot., they’ll come in, they’ll buy a property on a rent to buy, have a joint venture with the owner, use their contracting skills to get in, increase the value of the property, sell it, make a profit, without having to take on the ownership burden upfront.
The other reason why people like rent to buy is that it’s a hidden asset. You see, you can have fifteen, sixteen or twenty rent to buy houses, but no one really knows that you’ve got them. It’s a quirky thing. See, a lot of people, especially in this day and age where people sue each other, a lot of people like Rent-to-Buy because they can build a property portfolio and it doesn’t really show up anywhere that they’ve got this property portfolio.
More about Rent to Buy
Fast… To move into a rent to buy situation, you could probably do it in three days. Yet, if you wanted to purchase a house the traditional way, it’s probably going to take you about six weeks. So it’s very fast. Also, when you move into a rent to buy situation, it requires a lot less cash. A lot less out of pocket money that you will have to put across the table, in order to secure your rent to buy position. Usually it enables you to turn this house into your home and change the living style to suit yourself, and for a lot of people they find that’s an absolutely fantastic benefit.
Lastly, one of the great reasons why people choose to do rent to buy is simply because they can’t save money for the housing deposit. So what you can do is pay extra rent and that extra rent pays towards building a deposit. So eventually when you decide to buy the house, it can be agreed in the paperwork, that this extra rent that you’ve been paying, which is like a for savings plan.
So, there’s a bunch of different reasons there as to why people like rent to buy and it truly is benefiting to both the buyer and seller.
Find out more at http://www.1poundhouse.co.uk
Author: Russell Barunday
Article Source: EzineArticles.com
Android phones
See Why ‘Rent-to-Buy’ Works for original article.
By Chris Jamieson
