Sell and Rent Back - A Rental Option for the 21st Century

Purchasing a house by taking out a mortgage loan is the single largest financial commitment that the bulk of us will make during our lifetimes. Most are able to manage to meet the payments every month. Some, however, have to deal with changes in their lives (unemployment, financial complications, seperation) that will make the mortgage loan much more difficult to deal with. When things like that occur the option to sell a house to rent it back might become useful. The sell and rent back solution can provide homeowners with the chance to sell their current house and then rent it back from the buyer on a long-term basis at a price within their means. Some buyers even present the option for the initial owners to buy the home again at a later time. This is a helpful option for homeowners who would prefer to stay in their house as well as live a debt-free lifestyle.

Usually, property companies that are providing this option take care of all of the legal and administrative costs themselves. The rent that's charged normally is kept to a level that's affordable and is often much lower than what the mortgage payments are currently. The demand of sell to rent back arrangements in the UK is due to many different factors:

The sale itself takes less time to complete. This is because the property professionals hire specialized solicitors who do their job to get the sale done quickly. Often, the buyer purchases the property or house with cash, which can also speed up the process.

Sale and rent back products appeal mostly to people who are threatened by potential repossessions. Mortgage lenders are going to have different standards, but on average they repossess the home a couple of months after arrears start. The companies that provide the rent back service can help stop a repossession by leading you through the legal process and counseling you on how you can postpone the eviction. They also complete the property sale before the eviction happens.

The sell and rent back strategy might also appeal to a broader spectrum of people such as those who would like to release home equity. Many homeowners have been fortunate enough to have ridden one or more property boom cycles and collected a decent amount of money by way of equity. Most equity release programs are inflexible and pricey. The buy to rent back option can bring an effective solution in these situations. Unlocking the equity by selling and staying in the house warrants the freedom for many to travel the world, improve their quality of life or possibly invest in a second home.

Other people who could profit from this option are those that plan to move overseas. A typical issue for those who are emigrating is the timing on their house sale. The challenge comes when their visas have been granted and their overseas home is ready but their home in the UK doesn't sell. By selling the house and renting it back this obstacle can be managed early on in the process allowing the move to run more smoothly. Two additonal groups of people that may consider the rent back service are those going through divorce or suffering major medical issues. As part of a divorce agreement it is not unusual for one spouse to want to live in the house, but they don't have the resources to keep up with the mortgage payments. Deciding to sell and rent back at a reasonable amount could be ideal in this situation. A sell and rent back option will also secure the house during times of difficulty when illness brings lost wages. Rent payments can be met by the property equity and, if financies get better, there's the option to buy the house again sometime in the future.