Sell and rent back companies tend to offer, on average, 85% of market value on buying your home although this can be as low as 70% and as high as 100%. Some companies can offer 100% by giving you 70% upon completion of the sale and then 30% at the end of the tenancy.
Are they a reputable company?
Selling your house can often be far from a relaxing process. For your peace of mind, its important know the sell and rent back company you are dealing with is reputable, ethical, in good financial standing and will still be around at the end of your tenancy period. Make sure you do plenty of research on a sell and rent back company before you enter into any agreement with them. An independent personal recommendation is ideal if you can find someone who has gone the process, but as sell and rent back is still an emerging sector of the property this may be tricky. Searching the internet may also reveal some more information on the range of companies entering the sector.
Are you guaranteed long term rental? What happens when you become a tenant?
Look for companies which offer a long term contract, this will give you peace of mind that you cannot be evicted after a short period. When you become a tenant you will generally have to pay for council tax and the normal gas, electric bills as any tenant would.
Will you have to pay valuation costs and legal fees?
Most companies will pay the valuation costs and legal fees for you. Some companies will do this to make the offer seem more attractive but only buy the property for a lower percentage. This is not true for all companies as some will pay for the costs and fees whilst offering a high or full percentage.
Will your details be kept private/confidential?
All of the sell and rent back companies should keep your details private and confidential although ensuring the company is reputable beforehand should eliminate any risk of breach of confidentiality. Unless expressed otherwise, the only people who will know about what happened will be you, the company you dealt with and the solicitor handling the case, not even a sold sign should appear outside your house.
Will rent stay at pre agreed levels?
Some sell and rent back companies will offer a fixed rate for the first few years, after then the monthly rental payments may increase. Others will not guarantee a fixed rate and leave you open to increased payments later on in your tenancy. Often the best deal will be the sell and rent back firm who will offer you 10 years (or whatever the length of tenancy agreed) at a single fixed rate which is signed into the contract.
Will the valuation be independently calculated?
It is always advisable to go with a sell and rent back company that offers an independent valuation, especially by a member of the Royal Institute of Chartered Surveyors (RICS).
How long is the process likely to take? How quickly could you receive your money?
Companies can offer a 24 hour service if that is whats required and as long as the legal paperwork is fine, although most will take 3 4 week to get everything sorted. Your money is usually released after the transaction has been completed.
Who will own and maintain the property?
After the transaction has taken place, your landlord will generally be the company who bought the property from you and they will be responsible for taking care of any maintenance or emergency callouts that occur. That is why it is essential to ensure the landlord is reputable or is using an experienced and reliable property management company to quickly address any issues you may have. As for the contents, the moveable furniture is typically still owned by you, unless you negotiate a deal with the company to sell them the furniture as well.
Buying Back?
Some companies will offer a deal where you can choose to buy your house back off them at the end of the rent period. This is very useful for those who are having a difficult time financially but expect things to improve in two years or more when they can afford mortgage payments again.
Daniel Frusciante is a freelance writer covering the UK Housing Alliance sell and rent back sector within the property market.
There are many situations that determine homeowners to sell their property quickly. Whatever their reasons may be, most of these sellers often choose to rent back their house. In fact, sale and rent back has become quite popular in UK. We'll look into the advantages of selling and renting back your property later on in this article. Before we do that, let's make a quick review of the situations in which you would be most advised to opt for rapid house sale and rent back.
Probably the most frequent reason why people resort to rapid house sale is financial difficulty. Such a situation can be determined by many factors. Whatever these factors may be, many people are faced with the need to get a large amount of cash quickly, and in most cases, selling their house is their best option. It's understandable why some people might dismiss this option. After all, selling the house that you have lived in for so many years and where you have made so many beautiful memories can't be easy. What these people do not know is that they can sell and rent back their house, and even buy it back after a few years.
Another situation where your best choice is to sell and rent back your property is when you are faced with the imminence of repossession. If you have fallen behind on your mortgage or other debts, rapid house sale is the most convenient solution for you. Instead of losing your property to the lender, you can sell it and rent it back. This transaction will provide you with the cash you need to repay your secured loans or mortgage and allow you to make a fresh start, especially if you should benefit from a rent-free period, which can be agreed upon with the investor.
If all you money is tied up in your property, and you are facing financial problems as a result of this situation, you can always sell and rent back your property, which will allow the release of equity and enable you to overcome this rough patch.
Divorce or separation is another situation that determines people to go for sale and rent back. If you or your spouse wish to go on living in the same house, but you have to split everything, you can sell and rent back, allowing you to keep the house and pay your spouse half of the property value that he or she is legally entitled to.
If you are planning on moving abroad, you may be interested in rapid house sale and rent back. You will probably need a lot of cash to relocate, but you may also want to hold on to your property as a tenant, in which case your best option is to sell and rent back your property.
The advantages of the sell and rent back arrangements, which I think are already obvious, include the option of buying back your home in the future, realizing more equity in your home than through any other traditional method of equity release, the availability of this arrangement across all age groups, the opportunity to stop repossession proceedings, the opportunity to come across a large amount of money that you can spend as you see fit, and so on.
Both Ben Needles & Groshan Fabiola are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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