Gain Profit from Rent To Buy Strategies by Oliver Darraugh
by: Oliver Darraugh
It is common knowledge that every property’s value increases as time go by simply because brick and mortar do, which is an essential component of a structure. For the past few years, a number of people have been eagerly anticipating prices dropping down, especially now that the world has been hit by the economic crisis. But then again, property values easily recover and in fact are already ten percent above their normal set price at the end of July of the year 2007, gradually increasing to as high as twenty five percent within the next few years. As a rule of thumb, it is always advisable to purchase a commodity or property before it increases its value but then again, not all are fortunate or financially established enough to take advantage of such opportunities.
Luckily for everyone, there is what is referred to as the “Rent-to-Buy” option. Simply put, the “rent-to-buy” alternative is all about renting a particular property for a fixed price and giving the tenants the option to eventually own it after completing a series of payments as agreed initially. So in cases where in the value of the house increases within a few years or so, the tenants then can take ownership of the equity in their new residence. To demonstrate its advantages, imagine a house is currently selling for an amount of two-hundred thousand dollars, and the tenant agrees to regularly pay an amount of six-hundred dollars on a regular monthly basis, which is equivalent to an amount of seven-thousand, two-hundred in a year or so and within a five year occupancy, and the establishment’s value increases by three percent in a year or so, what will happen is that the property’s value will be around two-hundred thirty-one thousand and eight-hundred fifty-five dollars given that the tenant decides to finally purchase the house. Initially agreeing for a buying price of two-hundred thousand dollars and eventually paying a sum of thirty-six thousand during the occupancy period, the remaining balance will then represent an amount which is less than seventy percent which is already around thirty-one thousand, eight-hundred fifty-five which clearly shows a total of one-hundred eighty-eight percent return of investment.
With these equations in mind, one would realize the benefits of such an alternative and one would not think twice in exploiting it. Basically, it is just a matter of looking at the long-term benefits and being patient about results. To sum it all up, this can prove a promising alternative for those who wish to have their own home. Or anyone who no longer wants to continuously pay any rents without any long-term investment. In addition to this, this will help those who are unable to raise an initial deposit just to set foot inside the house, and can potentially help those who have damaged credit scores. Especially those who are new in the UK since this option is a wildly utilized option in the UK. Perhaps, the best thing about this alternative is that it does not pose any threat to an person interested in utilizing it. Besides, if all else fails, a tenant can always give up the idea of purchasing the home without incurring any bad record.
Oliver J Darraugh is a UK housing market analyst and exponent of rent to buy schemes so he can be of great help if you are having a hard time with rent to own http://www.renttobuyguide.co.uk/ properties.
|
The author invites you to visit: http://www.sellhousefast.co.uk |