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Rent to Buy Querymaree_bradross [57 Posts] Hi knowing much about rent to buy I was interested in x2 ads in our local rag for rent to buy. One was for a townhouse in Patterson Lakes and the other a 2 bedroom unit in Carrum, both under different contact names. Interesting though they were both $550 per week. Not knowing anything about the properties of course - but I thought the rate was high, if the normal rent was around max $350pw? We currently play $300pw for a 2 bedroom ground floor beach front flat with a rear yard, a couple of suburbs closer to Melbourne. siacci [53 Posts] A Rent to Buy is a description of a paperwork system used to buy and sell property. The Payment is actually a payment made to the seller to buy the property over a period of time. The payment is similar in structure to a loan payment. That is part Principle and part interest, but with a rent to buy the payment is made up of the bit that comes off the balance owing and the bit that does not. At the end of that time you would have a balance owing and would get a loan and pay out the seller. Its a great way to get into a house and pay some of it off as you go. The good part is the Lenders usually look at it a savings record for the bit that comes off the price. Under the rent to own the seller still looks after the outgoings. The idea is you get in and are paying off your own home. Dave   maree_bradross [57 Posts] Thanks Dave, I have contacted the agent acting on behalf of the home owner. It all sounds very fair and agreeable. It is for 2 years. I am going to have a drive by tomorrow. I keep you posted. BanjoSmyth [40 Posts]  Hi Maree Rick Otton is the main person in Australia who deals with that sort of thing. I think there is some info at the below website but if not just Google his name and I'm sure you will find heaps of info! Cheers and good luck Banjo http://www.BanjoSmyth.com maree_bradross [57 Posts] Hi - thanks for the lead Banjo, I had a look at the property on the weekend from the outside. Sadly, it isn't what we are looking for. Cheers Jaffasoft [562 Posts]  I would contact the owners anyway. As if you find one that you do like and on the market then I often heard of people putting together a deal this way. They want you to find the home YOU want. It all works out better if you get what you want. __________________________________________________________________ Rhys_Roberts [34 Posts]
'RENT TO BUY' SCHEMES
New name for an old scam.
by Neil Jenman Home ownership, that great Australian Dream, is harder than ever before. Across the nation, tens of thousands of families are locked-out of homes they can never afford to buy. The rising cost of rent plus day-to-day living expenses makes it almost impossible for these families to save even a minimal deposit for even the most modest home. And the banks, well, they just won't touch these battlers who, desperate and despondent, feel doomed to a lifetime of renting. Many would do almost anything for the slightest chance to own a home. It's a national tragedy. And so, when they hear about a scheme called 'Rent to Buy', their hopes surge. It's like offering water to someone dying of thirst. It sounds so simple, so alluring. Instead of renting a home you'll never own, you can now rent a home that you will own. Surely that's cause for celebration. Sadly, no. Here is a simple fact: 'Rent to Buy' schemes are dangerous scams. They are designed by predators who prey on the poor. They are a complete rip-off and should be outlawed. Like all slick scams, 'Rent to Buy' schemes are so seductive. The pitch goes like this: We are here to help you. We have a unique system. If the banks reject you, we can help you. And on and on and on it goes. One twisted truth after another. The straight truth, however, goes as follows. Victims of these scams (many of whom do not even realise they are victims until it's too late) are ripped off in three ways. First, they are charged an exorbitant amount of rent. In just one typical example, a property offered by a mob called Rent 2 Buy Pty Ltd (run by a 35 year-old spiv called Troy Boldy) offers a home for rent in the Sydney suburb of Fairfield at $550 per week. The market rent is about half that amount. Astonishingly, Boldy himself openly admitted yesterday that his rents are "double" the market rent. Okay, so that's the first part of the rip off. Buyers pay double the market rate for their rent. Second, as well as the exorbitant rent, the "buyers" (victims) pay an exorbitant price for the home. Sticking with the same example of Troy Boldy and the same home in Fairfield, the purchase price being asked for this home is $380,000. Yesterday, a local agent estimated its real value at between $250,000 and $270,000. So, on top of the double rent, the victims are also paying at least $100,000 too much for the home. From the moment they sign up with Rent 2 Buy Pty Ltd (or any similar company), they have instant negative equity (meaning they owe at least $100,000 more than their home is worth). The third rip-off with the 'Rent to Buy' schemes is that the buyers are not the owners of the homes they are buying. No, the homes remain in the name of the rogues running the scams. Quite simply, this means that if the buyers pay the rogues and the rogues go broke or their companies collapse (as many do) then the buyers - who have done nothing wrong - are instantly evicted. These schemes (sorry, scams) are just a variation of the notorious wrap schemes which were once promoted by get-rich-quick spruikers such as Henry Kaye, Steve McKnight and Rick Otton. Mr Otton still runs seminars - at thousands of dollars a ticket - where he teaches hundreds of wanna-be-property multi-millionaires how to set-up these predatory scams to exploit battlers. As the housing affordability crisis gets worse, more predators will be attracted to these scams. As the trusted finance commentator, Ross Greenwood said: "These could be the financial scandals of the next five years." He's right. Now, before the usual abuse from rogues spews forth at the author of this article, here's a final message to any battlers who may be tempted by these schemes... Go and see an independent lawyer before you sign anything. Any lawyer with any intelligence or integrity will tell you to have nothing to do with these typical 'Rent to Buy' schemes. Rhys Roberts LLB, PDLP, LLM PaulDobson [394 Posts] Hi Maree I guess it would be fair to say that all of the members of the Vendor Finance Association of Australia don't agree with Mr Jenman's opinion ;-) I'm not sure if you live in Sydney but details of the Association's next get together in Sydney are at: Also, a solicitor with a great deal of experience of Vendor Finance in Australia has some interesting information and history of Vendor Finance in Australia at: I hope this helps. Cheers, Paul Paul & Karen Dobson Talk to us about Wrap Training Joint Ventures. maree_bradross [57 Posts] I think rent to buy has merits for both parties. Sadly I am in Melbourne Paul. Jaffasoft [562 Posts] Not sure if Qsl007 does or has done any Wraps in Victoria. __________________________________________________________________ Rhys_Roberts [34 Posts] Hello Maree_Bradross, After you read my post if you still think that rent to buy has "merits for both parties" I will to a rent to buy deal with you. No problem. You choose the house, contact me and then let's come to an arrangement. Deal? Somehow I don't think you will want to do it. Qlds007 [4379 Posts]  No all of our wraps are and will always be in Qld. Cheers Yours in Finance maree_bradross [57 Posts] Hi Rhys - well that is a pretty easy offer, you could just propose unviable figures. Are you proposing a standard rent to buy deal? Regards Maree Tamar [8 Posts]  Hi there, Paul is totally on the money when he says that no-one in the Vendor Finance Association would agree with the views in that article by Neil Jenman that Rhys has posted and, Maree, I would be very reluctant to get involved with a possible rent-to-buy scenario with some-one posting an article expressing those views even if he said he doesn't necessarily endorse them. I suspect he is being tongue-in-cheek with his offer. Btw there are plenty of people doing Rent-To-Buys in Victoria. Cheers, Convener-Vendor Finance Association NSW Joint Venture with Us For Passive Positive Cashflow. jsarai [4 Posts] Hi, it is surprising that a legal practitioner decides to quote in the same post notorious Jenman and to offer a Rent-To-Own proposal. What was your motivation Mr Rhys? Do you need attention? Joe Sarai |
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