Homeowners are turning to rent-to-buy schemes as a way of getting around the falling property prices and capital gains tax.
One of the main advantages of this approach is that you can offload your property quickly, drawing on the equity in your property to help finance the new purchase.
A rent-guarantee scheme works by finding another buyer for your property and then guaranteeing them a rental income for an agreed period. If they do not find someone to buy the property within that time, you will continue renting from them at their current rate.
The idea behind renting out your property with a rent guarantee is that the tenant will find a buyer for the property, usually within two to three years. The person who has agreed to buy your home will pay you rent each month and give you rental guarantees, meaning that they'll offer a certain amount of money every year just in case the tenant does not produce a buyer for your property.
This means that if it takes longer than three years to find someone to buy your house, you'll continue paying rent at the same price. This could be an attractive option for people who are looking to sell their house but don't want the hassle of moving into something smaller or renting while they wait for their house's value to go back up.
A rent-guarantee scheme is often seen as a way of trading the equity in your property for a guaranteed rental income. The idea is that the new tenants will be happy to rent your property at a lower price than you are currently charging, enabling you to live off the rental income until you find another property.
The homebuyer then has to pay a contingency fee, which is usually 10% of the purchase price and this goes to whoever owns the lease at the time.
Owners will always have the option of continuing to rent out their property if they do not sell it within the agreed period.
A rent-guarantee scheme is a good option for many homeowners because it allows you to leverage your property. If you're looking for a quick sale, then this scheme is perfect for you. It helps relieve the pressure of having to sell quickly at a lower price and can help you avoid costly capital gains tax. You can also use your equity in the property to finance the new purchase, which will give you more options when choosing a new home.
The best part about this kind of scheme is that it’s typically risk-free. If no one buys your home within the agreed period, then you just continue renting from the person who guaranteed your rental rate. And if they find someone to buy the property before that time? Well, they just transfer ownership and return your deposit as well as any agreed rental payments back to you. There isn't much risk on either side with these schemes so it's definitely worth considering for anyone looking for a quick sale but not wanting to sacrifice their capital too much!
Finding a rent guarantee company is not difficult. Simply use Google to search for “rent guarantee” and you will get listings in your area. One of the most popular companies is Rent Guarantee Insurance, which has been in business for over 25 years.
If you’re looking for a way to make extra money and reduce your expenses, then renting out your property might be the best solution. Rent guarantee schemes are an excellent option because they provide a guaranteed income to cover your mortgage, as well as offering you a substantial sum of money for renting out your property.
The key is to find a company that offers a rent guarantee scheme that’s right for you. To do this, you’ll need to know what kind of property you own, how much the property is worth, and what type of tenant you’re looking for. Here are some questions to ask yourself when choosing the right company for your needs:
-What kind of property do I own?
-What is the value of my property?
-Am I looking for a long-term tenant or a short-term tenant?
-What are the legal fees associated with this type of agreement?
