Compare Sell and Rent Back Companies

There are tons of companies offering sell and rent back schemes now-a-days.

If you have just started to look into the option of selling your property to a company with a view to renting it back and feel overwhelmed with the choice out there then do not blame yourself.

You will find many fully respectable companies who do what they say. Even more importantly, they intend to do what they say. Therefore they do not make promises they can not keep.

Alas, they are not in abundant supply.

There are plenty others you want to be watchful of.

Far too many so called investors are trying to get on the bandwagon and posing as long term investors. In fact many are one man (or one woman) bands. And they are hoping to get on the investment property ladder with YOUR help.

You should do your in depth due diligence to figure out who is relatively successful and a respectable company.

But why does it matter? It is simple.

If you are selling your property to some one and rent it back then you want to be certain that the company is financially sound.

Just imagine this scenario: you put all your trust in this person (or a company). You sell the property and you have been made a promise that you can live in your property for as long as you like - or as long as you keep up with the rental payments. Now that is fair enough!

Few months pass and every thing is fine. But then a letter arrives out of the blue. The company you have been paying rent to every month is in financial difficulties itself. It has not been paying its own mortgage to the lenders. And those 'ever so friendly' lenders are chasing this company and may come after your house - the one you are renting back from this company.

That is a nightmare scenario for any one - let alone a sell and rent back tenant. We do not wish this on any one EVER! But this is happening out there and this is real, unfortunatey.

Not with all companies though... many companies will not do business at any cost if the deal is not right for them. If they feel that their future tenants may not be able to keep up with the payments then they may refuse to do business and walk away from the deal.

You want to look out for these companies. Why?

Which Sell and Rent Back Company is more likely to get in trouble?

Companies more likely to get in trouble will probably be those who are facing cash flow problems. In other words, they are expecting rents from tenants who are not paying on time. These companies have far fewer resources to collect rent from every tenant.

Ok, they may serve them notice of eviction but it takes time. Lenders still want their money on time  every time... right?

Since there are far too many of these 'misbehaving' tenants, company can not pay its mortgage on time and is now in arrears itself.

Remember, this may happen to any one who rather large companies will be more suspectible to it as they have least control on the quality because they have chosen quantity over quality... because of greed - to do more deals rather than being selective and careful with the types of properties they acquire.

What you should do?

If you are selling the property to move on and you like the price you have agreed then that is fine Go with it.

However of you are selling the property to rent back with a view to be there for a long term view then enquire the financial standing of the company.

Any successful company will be happy to tell you why they believe you are safe with them. If they are cagey or make up excuses of some sort then think again - you have been warned.

Compare the offerings from various sell and rent back companies. Use your brains not heart. Do not just look at the price being paid - look at the over all picture. For example, would you want to trade long term security with short term finances?

Companies who come across as charming may or may not necessarily be right for you. However the ones who are financially sold will almost be right for you.

If you are going to rely on some one to pay their own mortgage on time to continue to provide you and your family with the roof then make sure that you get this right.... do not be another statistic and join those who got this wrong!

About us:

We at Instant Angels do not believe in large and big numbers. We are selective of the properties we acquire, and even more importantly, we are selective of the sellers who will be renting the property back from us.

When we take on a new client, we make sure that they will not in any way affect our existing clients - because we do not want to fail any of our current clients. And we will do whatever we can to provide them with the right environment.

If you would like to discuss your requirements, including selling and renting your property back from us then give us a call.

17 Sept 2008

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