Sell and Rent Back - A Flexible Property Rental Solution for the 21st Century
Sell and Rent Back - A Flexible Property Rental Solution
Sell and Rent Back - A Property Rental Solution Fit for the 21st Century
Buying a home using a mortgage is the largest financial commitment that most people will make during their life. Most people can manage to pay the payments each month. There are others, however, that experience changes in their lives (redundancy, financial crisis, seperation) that wind up making the mortgage rather difficult to deal with. It's at this point that the option to sell and rent back may help. The sell and rent back solution will allow homeowners the option to sell their home and rent it back from the buyer on a long term basis at a practical price. There are some buyers who will even offer the option for the previous owners to purchase the property again later on. This is a great solution for those that would prefer to continue to live in the same house and also live a debt-free life.
Generally, property companies who provide this option pay the legal and administrative fees. The rent amount is normally kept to an affordable rate and is typically set lower than what the mortgage payments are currently. The appeal of sell to rent back schemes in the UK is a result of several factors:
The time it takes to complete the sale is shorter than average. This is because the property professionals use specialized solicitors who devote their time to get the sale moving fast. Typically, the buyer buys the house or property with cash, which will also speed up the process.
The sale and rent back option appeal mainly to those who are susceptible to impending repossessions. Different lenders have different guidelines, but on average they begin the repossession process about two or three months after arrears start. Companies that provide rent back services can help you to stop a property repossession by guiding you through the legal process and advising you on ways to put off the impending eviction. They can also complete the sale of your home quickly before the eviction occurs.
The sell and rent back method can also appeal to a broader group of people such as those looking to release equity. Many homeowners are fortunate enough to have cashed in on one or more property boom cycles and gained a good amount of money in the form of property equity. Most of the customary equity release schemes are expensive and inflexible. The buy to rent back option can present an excellent solution in those instances. Unlocking the equity by selling and staying in the house warrants the freedom for many to improve their lifestyle quality, travel around the world or perhaps buy a getaway home.
Others that may take advantage of this option are the ones that plan to move overseas. A frequent issue for those that are leaving the country is the timing of their UK property sale. The challenge comes when their visas have been granted and their new home is waiting but their home in the UK won't sell. By selling the house and renting it back this brick wall can be managed early in the process allowing a smooth relocation. Two additonal groups that may look into the rent back option are those filing for divorce or suffering major medical issues. As part of a divorce agreement it is not uncommon for one spouse to want to reside in the house, but they don't have the income to pay the mortgage repayments. Choosing to sell and rent back at a reasonable amount could be the ideal solution in this situation. A sell and rent back solution also secures the house during times of need when illness brings loss of earnings. Rent payments can be made by equity from the property and, if financies get better, there's the option to buy back the house at a later time.
About the Author
Oliver Darraugh is a freelance journalist online that writes and researches about UK mortgage deals and sell and rent back services. He makes his home in Birmingham.
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