Sell And Rent Back Is A Profitable Option
A rent back apartment is a home that the seller would like to sell and rent back. This can be very beneficial to the buyer if they do not wish to enjoy their new purchase right away. Don't forget about this great option when you are searching for a home for investment purposes as well as your own personal enjoyment.
Builders who would like to increase their cash flow but keep the property to use as a model home often use a rent back program. The model home will help the builder sell homes by allowing customers to see the builder's finished product. If you are looking for a great deal on a home, consider one that the builder would be willing to sell and rent back from you.
First, you'll benefit because you are guaranteed income: a builder must pay you rent. This is actually much safer than entering into a conventional residential lease, because unlike a normal renter, the builder has a vested interest in making his payments on time. It wouldn't do him any good to be evicted from his model home!
Second, houses used as models usually demonstrate all available upgrades to prospective homeowners. As a result, you will get the best possible house. Often, houses that builders wish to sell and rent back will be reduced in price for these options. Ultimately, this equates to a great house at a much better value than other buyers will get when building an equivalent unit.
Another benefit is the additional equity you have in the home. Often these homes will be the first offered in a new community. Builders routinely increase prices on a quarterly or monthly basis as the community phases progress. By buying the model, you lock in your price. Once the community is complete, you will be sitting on the equity of a nearly new home that cost your neighbors thousands more.
Of course, there are drawbacks to this arrangement. You have to be able to wait to move into your house for months or maybe even years. And though you signed a contract for a newly built home, your home will have had many people walking through it and will be susceptible to wear and tear. But if you are planning on retirement a year or two away, this would be a perfect arrangement. Additionally, builders are usually very diligent on cleaning and maintenance of the model home, making sure it is always in like new condition.
You get all the benefits of a rent back arrangement, If you can be patient and delay moving into your new home. Your increased equity with all the extra features, not to mention the income, will almost certainly make it sensible.
If you're considering purchasing a home to move into and as an investment, you may want to also look into a rent back apartment or a property that the seller wishes to sell and rent back. Usually homes for rent back is made available by builders who wish to increase cash flow but keep a home in inventory for use as a model home. This model home will be open to potential buyers to help visualize their own home should they contract with the builder. No construction agency will allow their model home to become inaccessible due to a missed rent check.
- Peter Shukla
