Hi Matt

All that you propose is possible and we stumble on them from time to time.  Mainly in regional areas.

However most Instalment Contracts (IC) do require the owner's permission for the VF buyer to rent the property, i.e. you would need to change that clause in the IC.  Equitable title is not a factor in this issue.  Possession is the issue in what you are proposing and all IC's in Australia give Conditional Possession in one form or another.

Cheers,  Paul

Hi matt

That depends on the vendor, i.e. the vendor selling the property with an Instalment Contract (IC).  Some will only sell to owner occupiers and others will allow an IC purchaser to rent but only under certain conditions/restrictions

The concern in the mind of a vendor financier is often that 'control' of the property is starting to move too far away from them.  This, in my experience, would be the concern you should address if you plan on putting such a proposal to a vendor financier.

Cheers, Paul

Hi

We've been using Leas/Options (Rent To Own) and other forms of vendor finance since 2003.  You will find quite a lot of properties for sale with vendor finance at:
http://www.renttoownhome.com.au  and
http://www.vendorfinancedirectory.com.au
You'll even find them on realestate.com.au and Domain.

If your deposit and borrowing capacity allow you to buy your PPOR with a traditional loan, I suggest you go that way, as you do normally pay a premium price for vendor financed properties (the penalty you pay for not being able to get 'traditional' finance).

However, if you are familiar with vendor finance it would be very possible to buy a property, directly from the owner, within 10km of the CBD, with vendor finance.  I'm unsure of Sydney townhouse prices so I'm also unsure if $1,000 per week would work.  If you have a price range we might be able to give a better guess.

For more information on vendor finance you may like to have a look at:
https://www.propertyinvesting.com/strategies/wraps
https://www.propertyinvesting.com/str…/lease-options
http://www.jvpropertypartners.com.au…d=50&Itemid=75
http://www.vendorfinancelawyer.com.au/
http://www.vendorfinance.asn.au/  The Vendor Finance Association of Australia

Cheers, Paul

Hi Paullie

If it were the owner is hurting, i.e. the property has been vacant for sometime, I'd move a bit further down the road you've already taken a baby step on    Baby step? Yep, you've already thought about leasing it for awhile and delaying the settlement.

Why not take the Lease/Option further, i.e. control the property with a lease and an option.  Often called a Rent To Own in the residential marketplace.  You could Lease it for 5 years at a mutually agreeable rental and take a 5 year option on the property at a mutually agreeable fixed sale price (the 'strike' price).  It is likely you'll have to offer a premium rent to make the offer attractive to the seller but you then negotiate a 'price credit'.  You get a 'price credit' by asking the seller, 'how much of the rent is credited towards my deposit?'  I've often been surprised at the excellent 'price credits' that are offered.

And, as long as the property isn't in Victoria, you will only pay stamp duty on the 'option fee', i.e. full stamp duty is deferred until you exercise the option.  The option fee is usually quite small and is, in effect, a small deposit.

It may sound 'different' but believe me you'd be surprised at the number of large commercial premises that change hands this way.  We've found them to be a great way to 'control' factory units.

Cheers,  Paul

Of course, if you have a Residential Lease on a property and a Call Option over that same property (often called a Rent To Own), you do not have any ownership of the asset until such time as you exercise the Option.

Cheers,  Paul

Hi Cameron

Do you mind sharing with us why you need to 'sell it fast!'

Cheers,  Paul

Hi Tinsel

Disclosure first   Rob, Karen & I started vendor finance with Dave & Julie back in 2003 and we're personal friends, so I'll try not to be too biased 

I believe it is important to build a good foundation to your vendor finance knowledge and there are numerous educators to choose from.  Some that spring to mind are:
Sean Summerville  –  http://www.thepropertyking.com.au/
Rick Otton  –  http://www.rickotton.com/
Dave & Julie Siacci  –  https://vendorfinanceinstitute.com.au/home/siacci-system-of-vendor-finance-1997/
Paul Zalitis  –  http://www.aussiewrapper.com.au/Cash-Flow-Investing.html
Gordon Ku  –  http://gordonku.com/

It is worthwhile researching all these educators and choosing one that suits your style.

We know lots of people who have attended the seminars/courses supplied by the above educators and there seems to be a common result for all seminar attendees.  The urban myth about results from seminars says that 80% of attendees do absolutely nothing once the seminar is finished and out of the 20% that actually take action, only 20% of them are left after one year.  It may be an urban myth but our experience shows this to be pretty spot on.

I believe all the above educators will give you the information you need to get started but it's then up to your ability to 'stick' to the task.  Our experience shows that taking a lot of continuing action and not giving up so you can attend the next great 'make a million dollars easily seminar', is the only way to be successful in any business enterprise.

In short, yes, there are many people doing it successfully.  Good luck with you research.

Cheers,  Paul

Hi Raf

If the property had been your PPOR you could have transferred the title using the 'Exemption from Duty – Transfers to married couples ….' form (in NSW) at:  http://www.osr.nsw.gov.au/lib/doc/forms/oda009.pdf
A bit more information on the matter is available at:  http://www.osr.nsw.gov.au/about/services/osrassist/family/transfer/

Of course you may not be in NSW and the PPOR issue may slow you down    However it may be worthwhile researching how other States handle the issue.

Cheers,  Paul

Hi Russell

The new rules regarding Options in Vic don't relate to 'above market rent'.  If you take an Option over a property in Vic, without a Lease, no Stamp Duty is payable.

Stamp Duty however is payable on the 'strike price' of an Option, if the Option holder also has a Lease on the property.

These new rules where brought in because long term Lease/Options were being used in large commercial transactions and the State Revenue Office was missing out on a lot of revenue     Lewis O'Brien, a solicitor and member of the Vendor Finance Association, has been fighting a tough battle against these new regulations with the SRO but to no avail so far.  At the moment the SRO unofficially admit they didn't mean to 'rope in' residential property but, to date, they aren't about to change the rules.

As a result of this, vendor finance Instalment Contracts have become more popular in Vic.  You'll find some lively discussions on the subject at the next Melbourne meeting of the Vendor Finance Association.

Cheers,  Paul

We have been investing in residential property between Raymond Terrace and Singleton since 2003 and we're very happy we did.  However I do have to agree with 'Key' above, i.e. there are some lower socio economic 'war zones' in the area that are very tempting because of their lower price point.  We now stay well away from them and the upper end of the market.

Cheers, Paul