Rent not Paid – Part 2
Paul: Before I read the e-book, I would like to know a bit more about Property Lease Options and how it is better than the usual tenancy agreements I have been signing all this time.
Karen: I would be glad to help you any way I can.
Paul: If I opt for Property Lease Option now, will I find tenants who would want to participate in this?
Karen: Yes, that is what makes Property Lease Options such a great arrangement. Both tenant and landlord have a stake in the property. It offers tenants a good deal, so you will not have trouble finding tenants.
Paul: From what I understand, the tenant leases property on condition that he or she will be able to buy the property at the end of three years.
Karen: It could be more than three years, though the minimum lease period is generally three years.
Paul: How exactly does it solve the problem of rent not being paid?
Karen: First, the tenant is interested in buying the property. You must understand that many of these people cannot afford to buy homes through any other method, property prices being what they are today. Besides, they are being offered the chance to live in the house before buying it. That is not an offer they get every day! That makes them eager to be in their landlord’s good books.
Paul: What about property management? How would I find the time to look after the property, or carry out repairs and renovation?
Karen: You don’t have to do any of these. Property Lease Agreement does more than solve your “rent not paid” difficulty. The tenants will take care of the property because they may want to buy it later. So no more trashed rooms, broken windows, or cigarette marks on expensive kitchen fittings.
Paul: How do I turn my negative cash flow into a positive one so that I can repay the mortgage?
Karen: First, you don’t have to spend on constant maintenance. Second, the rents keep coming in for a longer period than the general AST term. There will not be a time when you won’t have a tenant. So no more worrying about property lying vacant and rent not being paid. Third, you can ask for more rent, and the extra rent will be counted towards final payment for the purchase. Landlords often use this extra money for paying the mortgage. Fourth, most landlords ask for a down payment when signing the lease.
Paul: That brings me to another question. Will really not need the services of a “find me a tenant” agency anymore?
Karen: Once you have reached an agreement with a tenant, they will want to stay until the time the home can be theirs. If they like the property, they may buy it, and release you from the task of having to find tenants for it.
Paul: What if tenants don’t want to buy the property at the end of three years?
Karen: In that case, apart from having to look for another tenant, you don’t lose much. You get to keep the down payment on the property in most cases. The higher rents will help clear the negative equity on your home. You would have been able to rent out the property for a longer time than possible with usual tenancy arrangements.
Paul: How do I draw up the tenancy contract?
Karen: Go through the e-book published by UK Property Ladder. You will find answers to this question and many more. You can read through at your leisure and make informed choices. For details click on this link below:-