Sell and Rent Back Scheme Concerns and Making the Right Choice of the Company

Despite the growing popularity, a Rent-Back isn’t everybody’s best option. This article aims to give all the facts and information one needs to make the decision that’s best. Here we address your concerns; explain the plan details, including its advantages and disadvantages. Recently there’s been bad press regarding some sections of the sell and rent back scheme. In an industry that is currently unregulated, there’s the opportunity for some individuals to act unethically or unprofessionally. A Rent-Back is a long term commitment so you should look at how established the company you are dealing with is and what guarantees they offer. Speak to as many companies as possible and whether you use us or another company, here’s what to watch out for:

• Does the buyer need a mortgage? Very few buyers have cash. They have to apply for a mortgage, get their lenders’ approval and then wait for the mortgage offer to be issued. This all takes time. We’ll pay cash for your property so there’s no delay.

• Your long term security of tenure. This is a long term commitment for any purchaser so you’ve better protection with a large well funded organisation than with an individual. There are also some companies offering a guarantee for a few years. All they usually offer is an intention to renew the tenancy every year, not a guarantee of security of tenure.

• Franchised operations. Groups of buy-to-let investors club together to share marketing costs. Your details would be handed to a local franchisee who’d buy the property themselves. It is possible that they will be honourable and will have the financial backing and experience to offer you a long term solution but there’s risk involved.

• Be wary of percentage quotes. Some companies quote a percentage of the market value as their purchase price. This can be misleading when a high percentage is quoted, but it’s based on a low valuation. When quoting a percentage it should always be based on an independent Chartered Surveyor’s internal and external valuation. Make sure the company assures your complete confidentiality. Ideally, they do everything by post and over the phone. There’s no sale board, no property details in agents windows, in the local paper, or on the internet. As far as anyone else is concerned, it’s as if nothing has happened. Find out whether a company guarantees a rental figure to avoid surprises in the future.

Article Source: http://www.debtfinancearticles.com.

About the Author:
Cedric Wade is an expert at Beneficial Homes.