Sell and Rent Back - The Only Realistic Financial Solution

The main reason why any homeowner would consider the sell and rent back option is because they are struggling financially. We are living in very difficult times at the moment and money is hard to come by which is why so many people are struggling to repay their monthly debts which include mortgages, secured loans, credit cards, store cards and worst of all…loan sharks.

When money is scarce and it’s hard to pay all the debts plus all the household bills each month, immediate action must be taken to resolve the problem. If your situation allows it and you have time then you must increase your income and get another job or better still, two jobs. If your time is limited and more work is not a possibility then you need to think about reducing your monthly expenses. Anything which is not a necessity must go.

If the above steps have been taken and it is still not enough to stop the letters from the mortgage and secured loan lenders from dropping through your letter box then it is time to think about using your house to bail you out. This is called the sell and rent back option.

How does the sell and rent back option work?

The sell and rent back solution allows the homeowner to sell their house providing them with enough money to pay off all the secured debts and once all the property transactions have completed remain living in the same house paying rent to the person or company who bought it from them.

For the sell and rent back option to work there must be some equity in the property. The more equity there is the easier it will be to work out a solution. The scheme does not work where there is negative equity (more owed on the property than it is worth) and with falling house prices over the last 12months it means many people will not qualify.

Depending on the homeowner’s circumstances a few options may be provided from the buyer and it is the homeowner’s choice which one they decided to opt for. The choices will range from receiving a higher price for the property and paying a higher monthly rent to receiving less money for the property but paying less rent each month. All options should pay off the total debt on the house leaving enough money to pay the rent each month.

Once agreed, the normal time frame for this type of transaction is 28 days. Prior to completion a tenancy agreement will be provided stating exactly how much rent is to be paid and also what the terms are for rent increases. Do not accept a deal unless everything is in writing, especially relating to the rent increases.

How do I find someone offering this service?

There are many companies offering this type of service. The easiest way is to find them on the internet. Simply type in the words sell and rent back into a search engine and choose from any number you see. One such company which has a good track record is Beese Properties and what stands them out from most of the others is they also offer a buy back option. This means after a few years when your finances are in a better shape, you will be able to purchase the house back again at a pre agreed price when it was initially sold.