Selling your house & renting it back question

Bakeybadoo

You know those companies who buy you house from you and allow you to rent it back from them? Do they do a credit search? Do you have an automatic right to stay after it's been sold if you are a tenant in the property already?

Remmer

If you are even considering that option you really need to talk to an IFA. Some of these companies, and I repeat some, are sharks

Bakeybadoo

It's a long, long and complicated situation.

Erm, a relative took a loan out to buy this place, the place is rubbish and the rent is going up from our perspective. Getting rid of it won't be easy - bad area, horrible immediate area (empty shops below, no maintainence done to the place and several empty properties either side) and the leaseholders live abroad and a very elderly and stubborn solicitor acts on their behalf. Because of him, it took us 6 months to complete and get the paperwork in order and no buyer in their right mind will want to hang around and wrangle that long.

So, we were thinking either auction it (again the time thing would be a problem) or go for one of these cash buying companies.

Remmer

Equity Release is usually only open to peeps over a certain age, I think 60 but could be wrong. Give me till tomorrow, I have a mate who is an IFA, unless anybody else can answer it sooner but...be careful

Bakeybadoo

What is equity release? I'm ashamed to admit it but anything home wise is totally over my head. I need it spelt out.

Thanks for your help, much appreciated!

silvercar

Bakeybadoo wrote: »

You know those companies who buy you house from you and allow you to rent it back from them? Do they do a credit search? Do you have an automatic right to stay after it's been sold if you are a tenant in the property already?

Doubt they do a credit search. They know your in financial need or you wouldn't be selling to them.

Expect to get 70-80% of market value.

They will need to know the amount of secured debt (mortgage, secured loans etc) on the property. If it is over 70-80% then they won't be interested in buying it.

Some do offer sale and rent backs. The problem is agreeing the right rental level and sale value. They can be flexible in that a higher sale value and lower rent may be possible.

How much security you get is difficult. In order to take a mortgage on the place, they won't be able to give you much more than a year's tenancy agreement; although this is extendable, you will have no absolute guarantee of this.

The whole area is a unregulated minefield. Beware of any company that insists you pay for a survey/ valuation. Any legit operation will pay for their own survey.