Suppose you own a house with a partner and you have a couple of children. Everything is going smoothly and then the relationship ends. One of you needs to move out, leaving the other to raise the children and manage the mortgage. The trouble is that the person left behind doesn't earn enough, but you both agree that you want to keep the family home so that the children are secure. Rent back offers a way to do this.



Another common scenario where a property rent back scheme might be useful is where a person becomes ill and is unable to earn. That person gets into mortgage arrears and has other financial difficulties. A home rent back scheme could solve those worries in one simple transaction and put money back in your pocket.

Sell rent back is also useful where you are in serious financial difficulties. If you are in debt, have defaulted on a secured loan and have several months or mortgage arrears, then a home rent back scheme may be the only way to stage a financial recovery. After all, selling your home is better than having it repossessed and sold by a lender who may get just enough to repay the debt, leaving you with nothing.

So, how can you profit from a house rent back scheme? It's easy. First, find a company that offers a home rent back deal. This is as simple as looking in the classified ads, checking out the yellow pages or searching on the internet. Book a time for them to come round and look at your house. The rent back company will value your home, looking at the true market value of the property. If your property is in good condition, then you'll get a better valuation than if it needs significant work.

The next part of the rent back process is the offer. The property rent back company will offer you up to 85 per cent of the assessed value of your home as a cash sum. You could wait around and hope to sell your home for the full value, but the property market is fickle and there's no guarantee that you could get a sale on the open market before your home is repossessed. Rent back offers you that guarantee. You normally get an offer within a couple of days of valuation. If you accept, the deal can be done in less than a month.

Most people don't like others knowing that their home has been repossessed. With rent back, you can avoid this stigma, by selling your home first and arranging to rent it back from the company at a fair market rental. Normally, you sign a tenancy agreement for six or 12 months, but longer agreements are often available. No one need ever know that you have sold your house, and with some companies you may be able to buy it back when you get straight.

Once you've got the money from the sale, you can repay mortgage arrears, loan arrears and other debt to get the lenders off your back. Then you have money in the bank while your landlord is responsible for maintaining the property. That's another advantage of rent back.