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    Default Rent To Buy Homes - Thoughts?

    Just after some thoughts and opinions on rent to buy homes. At present there is lots of advertising on my local BSS pages and community pages on FB for these kinds of houses. Offering people a brand new home with no deposit and taking your rental history into consideration. These homes are in new estates and would sell for around $450k.

    I got into an online argument with the guy advertising these and he wasn't able to answer basic questions such as what happens to your FHOG and do you pay mortgage lenders insurance. The whole scheme screams dodgy to me!

    I see so many people commenting on these posts that I would hate to see get ripped off (my own cousin being one).

    Does anyone have any experiences/thoughts about these types of deals? To me if it's too good to be true it usually is.

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    Default Rent To Buy Homes - Thoughts?

    I don't have experience with them ( agents are not allowed to be involved with these types of schemes and I've never heard of them in our area ) but I've never heard good things about them , mainly as I'm pretty sure you don't actually own the home until the end of the rental period when your name actually gets transferred to the title and the rents and sale prices are usually much higher than market value - I would see a solicitor before getting involved and doing a ton of research because yes if it was that good everyone would be doing it!

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    Chippa  (09-08-2016)

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    I've heard of this in a shared equity arrangement. Usually a community housing or affordable housing provider has an arrangement with a tenant to rent the premises at a reduced rate because they are buying a portion of the property. E.g. They rent 75% of the property and get a loan for the remaining 25%. They pay off their 25% giving them equity to purchase more of the property and rent less of the property. Over time they own the whole property.
    I've only heard about it from more of a social outcome perspective. Helping people who would otherwise not be able to get a mortgage, build up equity, end up owning their own home and moving out of social housing.
    What you're describing sounds too good to be true - especially if they can't answer your questions

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    Chippa  (09-08-2016)

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    Quote Originally Posted by Elijahs Mum View Post
    I don't have experience with them ( agents are not allowed to be involved with these types of schemes and I've never heard of them in our area ) but I've never heard good things about them , mainly as I'm pretty sure you don't actually own the home until the end of the rental period when your name actually gets transferred to the title and the rents and sale prices are usually much higher than market value - I would see a solicitor before getting involved and doing a ton of research because yes if it was that good everyone would be doing it!
    That's interesting that you aren't allowed to be involved with them. They are being really heavily pushed where I live. I find the whole setup so dodgy. Banks are hard to get loans from for a reason! I haven't actually met anyone who has ever done this but I'd like to!

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    Quote Originally Posted by Chippa View Post
    That's interesting that you aren't allowed to be involved with them. They are being really heavily pushed where I live. I find the whole setup so dodgy. Banks are hard to get loans from for a reason! I haven't actually met anyone who has ever done this but I'd like to!
    It's more a finance industry scheme and not real estate industry related - they are not covered under our property act or tenancy laws as technically it's a private loan between 2 people ( or usually a company ) so we can't legally be involved as its not actually a standard contract for sale of land or a standard lease agreement either as they don't comply with we have to comply with ( if that makes any sense!)

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    Chippa  (10-08-2016)

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    Seems dodgy to me.

    It's very popular in Tasmania though apparently u borrow like a personal loan and then pay rent for X amount time of somethjng I can't rememeber but it's very strange haha. Maybe because I have a mortgage 😂

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