Before You Sell And Rent Back You Must Ask These 10 Questions

Before you chose a Sale and Rent Back company you need to find out the following:

1. How long can I stay?

It is extremely important that you receive confirmation about how long you can stay if you plan to sell and rent back. If you have no set timeframe and want to stay for the long term it is important that you receive confirmation in writing to this effect. This needs to be in both a letter of intent and the tenancy agreement must include a right to renew clause.

2. Will the rent rise and if so, when and by how much?

It is important you get the answer to this question in writing. It is common for landlords to raise rents every year or two but some sale and rent back companies may have longer fixed rent periods in exchange for a lower sale price. Matching annual rent rises with inflation or a small percentage (i.e 4 to 5%) is common. Be wary of a company that says it will never raise rents as they are likely lying (unless they have bought your property for a very small percentage of its market value).

3. Will there be a tenancy agreement?

If you are not offered one consider walking away. Having an Assured Shorthold Tenancy Agreement signed by both parties is very important to protect your rights as a tenant. Without this you may be classified as a squatter and forced to leave your property after the sale. 

4. Do you intend to sell the property in the future?

If you are hoping to stay for the long term, obviously you want this answer to be no or not until you decide to leave. A good sale and rent back company will intend to rent out the property for the long term (even if you decide to leave and they have to get someone else in). They will have a buy and hold strategy and should not rely on selling their rent back properties to make their money.

5. Who will be responsible for repairs?/p>

This should be clearly stated in the tenancy agreement but as a general rule the landlord (sale and rent back company) is responsible for all maintenance issues (i.e. broken boiler, leaking roof). This should all be made clear in the tenancy agreement.

6. Can I redecorate?

Most sale and rent back companies (and landlords in general) are okay with their tenants redecorating as long as they do not devalue the property in any way. It is in their interests for their tenants to feel like it is there home. You will need to get permission before you do any work.

7. Can I chose my own solicitor?

The sale and rent back company should allow you to chose your own solicitor and most of the good ones will pay the first £500 of their fees. However, they will normally suggest that you chose one that they recommend. This is because they know they will do the job properly and quickly. One of the main reasons property purchases take so long is because of delays with solicitors so if you do chose your own the sale and rent back company are unlikely to guarantee the completion date.

8. Will any fees be payable upfront?

A good sale and rent back company will not charge you any fees up front. They should pay for any valuations and surveys necessary. If you are asked for any money up front refuse and use another firm. Some less reputable companies ask for a valuation fee and then make a ridiculously low offer. 

9. Does the company have references?

A good reputable sale and rent back company should be able to provide you with testimonials from current clients.

10. How long will the process take?

A good company will be able to complete the sale in a timeframe that suits you. If you are not in a repossession situation they should have the ability and experience to complete quickly and stop the eviction (in 1 week or less if necessary). Normally the sale will take about 4 weeks but can be delayed if necessary (i.e. until the redemption penalty on the current mortgage expires)

 

My Personal Financial Management Issues

One of the largest problems people have with money is knowing what to do with it. Though you may think that not having enough to pay the bills is something that happens when you just do not make enough money, you should know that this is usually only half of the story. There are plenty of people out there that make more than enough, but they spend their money in all the wrong places. Their financial management skills are no good, or none existent. This often comes from parents who had the same problems. We learn by example.

Impulse control, or rather a lack there of, is normally one of the largest reasons why people have problems with personal financial management. There are many reasons for this, but most people have problems because we live in a world that caters towards immediate contentment. That is something that our grandparents and great grandparents would find to be an alien concept. If they wanted something they couldn’t afford, the saved. Most don’t go with that concept any longer.

When you sit down and think about how much you make, and then comprehensive up your monthly bills, you can see if you greatly should be having a problem with your financial management or not. Most find that they look at the totals and have no idea why it is that they can not seem to get caught up and current with their utilities, rent, or mortgage. Even with the rising prices of gas and food, things should never be as bad as they are for some families. What is needed is a good plan for financial management, even if it means hiring someone to help.

When you want to see what is going wrong on your own, you can really think about what you spend your money on each day. Are you spending three bucks each morning for coffee? That’s almost 90 dollars a month. You could save most of that by making your coffee at home each morning and taking it with you. There are tons of petite expenses like that which can make a huge difference. There are also other impulse buys and high credit card bills that can hurt with financial management. You should think hard, as you can’t fix anything that you don’t know is going wrong just yet. The more you know about your habits, the easier it can be for you to fix them.

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