Sell and Rent Back schemes have both benefits and disadvantages, if you are considering entering into a Sell and Rent Back scheme you need to consider the downside as well as the advantages.
The benefits of Sell and Rent Back are very clear for people in certain situations. One of the biggest advantages of Sell and Rent Back for most people is of course that there is no big upheaval to your life as there is with moving house. You can carry on living in the same property and you still own all the furniture, fixtures and fittings.
Another advantage is the fact that the investor will be responsible for buildings insurance and any general or major maintenance. Your main responsibility to keep enjoying these benefits will be to pay the rent at a rate which you should agree in writing.
Another major advantage of sell and rent back is the speed of completion as you will be selling to an investor who will be ready to buy in the fastest time possible. In many situations such as impending
repossession a long drawn out house sale just isn't an option. In those circumstances you would benefit from the fast timescales of Sell and Rent Back.
Another situation in which Sell and Rent Back could be of benefit is if your fixed rate mortgage is coming to and end and you do not have enough equity to refinance. In this situation it could be to your advantage to find out if there’s a Sell and Rent Back scheme to suit you.
Some Sell and Rent Back schemes offer the advantage of what is known as buy back option. This would give you the benefit of an option to buy back your property at an agreed price, after an agreed period of time.
The main disadvantage of Sell and Rent Back is that you will not get as much for your property as you would on the open market. As property prices are in a general downward trend investors usually only offer up to 80% of the surveyed value of a property. As mentioned above this disadvantage can be outweighed by the benefit of a fast completion.
Some Sell and Rent Back schemes do not offer you a guaranteed term of tenancy, unless you want to move on quickly this could also be a major disadvantage for you. Always make sure you agree how long you stay in your property in writing before you agree to a Sell and Rent Back scheme
Before deciding if you think a Sell & Rent Back scheme could benefit you should always consider other options first. Generally these schemes are most suitable for those facing
debt problems, mortgage arrears or repossession, under other circumstances it may be that refinancing or remortgaging has more advantages for you.
In the final analysis whether sell and rent back will benefit you will depend on your individual circumstances. Different Sell and Rent Back schemes have different advantages and disadvantages so think carefully and take proper advice before proceeding.
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Please Note :The opinions expressed on this site are given in good faith and should not be taken as legal or financial advice. You should always take professional financial and legal advice before selling your property.
