Thoughts on BTL Leaseback?

jonnny

Hi,

Am looking at different options for purchasing a BTL property.

At one new build development was offered a showroom leaseback option where I purchase a property and then the developer leases it for a period of upto 3 years.

I was told that I would receive a guaranteed rental income of 6% for the period.

Does anyone on this board have any experience with such schemes?

I can't find much info and would like to learn what are the pitfalls if any and what are the issues/questions I need to ask.

Thanks for your help

J

mrginge

3 years. 6%

Think i would politely decline that one.

jonnny

Sorry my mistake - 6% per year.

J

jonnny

bump

I get the feeling it is something not that common and I should be extra aware.

Thanks,

J

martinsurrey

it is not uncommon, but you should be careful.

don’t forget that after your 3 years you will get a house that has had 1000's of people through the door, so carpets will be ruined, the heating will have been on almost none stop for 3 years (show homes are always very toasty!) but will have had very little real snagging done. The shower/bathrooms will have been unused for 3 years and you will be out of the 2 year developer warranty period if you find any minor problems.

These deals do work for a certain type of people, but not everyone (for example you will never get called about something being broken and expecting you to fix it).

jonnny

Thanks Martin,

An an expat the comfort of getting a fixed lease without the hassle of dealing with tenants and refurbishing etc. is what appealed to me.

The property is a flat so I wonder if the wear and tear is more minimal when compared to a house?

J