Rent to sell

We have all heard about rent to purchase where the tenant secures an option to purchase at a later date.

Here is another way to look at it. Ive done this on two properties that I purchased on the same day.

If an agent suggests that the vendor would like to rent the property back from the new owner, ask to talk to the vendor.

I was looking at a property in Smithfield Plains (SA) that was on the market for 97k in 2003. The agent told me that the vendor would like to rent back the property. I spoke to the vendor and offered 82k with a 12 month lease and a further option of 12 months. The rental return potential for the property was $135 a week according to my research. I offered the first 12 month lease at 110/week and the second 12 months at 120/week. The vendor jumped at this suggestion. I sacrificed $2080 in rent and saved 15k. The vendor stayed in the property for 4 months before finding a new property and moving on.
This property is now returning $155 / week

I had the rental agreement drawn up at $135 (so that the bond would be more), then added a rebate of 25/week.

This property is now returning $155 / week

Just something to remember when you are told that the vendor would like to rent back.