Too good to be true?

pukkamum

Originally posted in wrong section so reposting here
Happy New Year everyone 
this company has come to my attention and I wondered if anyone had any thoughts or knowledge about/on them. The premise is that you find a house you want to buy, they buy it and rent it back to you. They put away a portion of your rent and it goes towards putting down a deposit on the house when you are ready to buy. If you don’t wish to buy you can take out the money set aside and move on. You have to pay a 1% deposit before renting it from them.
it all sounds too good to be true to me.....
https://www.joinapricot.co.uk/

FreeBear

Hrmm... No FSA approval, and I suspect it is required. Be very,very careful. You could end up losing a lot of money and be homeless at the end of the day.

davilown

Spam???????

saucer

Before I say anything else I would emphasise I know nothing about this company, their reputation or business model. 

With that aside, it looks like they are small and the idea is that they buy a property to rent to you. It seems a bit like shared ownership. I suspect the devil will be in the detail, e.g. how much of your rent is saved on your behalf (I suspect it will be low). How will your rent compare to market rent for the same area? How does buying the property back from them work?

Furthermore I would wonder how many properties they have already purchased. I would have thought that, in order for any model to work, they would need to be getting the properties very cheap. Otherwise why are they not simply just buying lots of property to let out and leaving you out of it? 

No FSA approval (as mentioned above) …caution indeed very much required.

FreeBear

davilown said: Spam???????

The OP has been here since 2006 and has clocked up 3.9K posts. Hardly the profile of a spammer.

lisyloo

I wouldn’t touch any investment that is not FSA approved.
if they go bust, you’ll get nothing.

The only way I’d be interested if it worked for renting without getting any of the investment back.
id be surprised if that was the case so the summary is be very very careful.

id only take it if it stacks up as a rental.

paulj2021

are you are you locked into a contract to eventually buy from them? If so they could theoretically charge you what they like when it comes time to buy? Do you get your money back if you change your mind? What sorts of additional fees do they charge? Who’s responsible for maintenance etc in the mean time? What other conditions are imposed on your future purchase, such as using their approved mortgage provider? Sorry if this is covered in the link but I’m not clicking on it 

pukkamum

davilown said:

Spam???????

Honestly not, I’m a long-standing member and just genuinely interested, my first thought was that it is a scam and wanted to see what others thought 

user1977

We've had threads in the past about other variations on this theme. Yes, of course they're too good to be true, otherwise everybody would be doing it.

Note the company was incorporated last Wednesday...

https://find-and-update.company-information.service.gov.uk/company/13821283

The sole director appears to have no experience in the property industry, and I can't see that the only other shareholder has either.

pukkamum

paulj2021 said:

are you are you locked into a contract to eventually buy from them? If so they could theoretically charge you what they like when it comes time to buy? Do you get your money back if you change your mind? What sorts of additional fees do they charge? Who’s responsible for maintenance etc in the mean time? What other conditions are imposed on your future purchase, such as using their approved mortgage provider? Sorry if this is covered in the link but I’m not clicking on it 

From what I can make out rent is charged at market rate, a sale price at the end of the contract is agreed before signing taking into account the rise in house prices  and the rent saved for you is between 10 & 25%. If you don’t want to go ahead with the sale you get the saved portion back. 

In theory it seems like a very good idea however I would want to see a good few years of this working before I did it. It is a shame that it smells like a scam and probably is, if only the government could bring in a scheme similar to this hay that didn’t have the pitfalls of shared ownership.

IamWood

Just to remind: There is no free lunch

Be very careful!