Renting To Buy

We get enquiries from all sorts of people - with all sorts of problems.  Often people who come to us have had credit problems in the past.  So how do we treat people with these problems?   I have a two word answer: utmost respect!

The fact of the matter is that life isn’t always plain sailing, and sometimes we get hit with a curveball, from nowhere.   In fact I had a business failure which in turn affected my credit rating.

This week we received an application for a rent buy plan from a couple who had declared bankruptcy some time ago.  These are good people with good strong incomes, good rental references and money in the bank.  But in a previous life they got themselves into trouble.  So can we help people with severe credit problems?  Of course!

The main things we look for are as follows:

• Strong income
• Good rental reference
• Stability
• Positive attitude
• Some savings

That’s about it.  Can you qualify for a rent buy or vendor finance plan?  Best thing is to go to fill out the form above.  You can also visit our website at Home Buy Express, for more info.

So the banks have been freezing home loan payments for people who have lost their jobs and finding the going tough.  This is a new initiative by the Big Four banks.  This is a good move, but the point is that we have been helping our rent buy clients who have faced short term problems, for the last EIGHT YEARS.

This is not to say that you shouldn’t do whatever you can to get your financial train wreck back on the track again.  That’s a given.  But it’s nice to know that if you have a rent buy arrangement with us (at Home Buy Express), you will have ‘partners’ who will work with you to rectify the problem.  The last thing you want is for you to lose your house.    We know that.  And we will only ask you to leave the house as a last resort.

Judging by all the interest we’ve had this year, rent buy arrangements are proving popular.

At Home Buy Express we’ve been helping families into their own home via these arrangements for 8 years.  And I have to say this is one of the best times because of the heightened interest from tenants who are highly motivated to own their own home.

In fact we’ve hardly been advertising this year, yet still the enquiries keep flowing.  Why?  Because this is a good time to be buying.  House prices have moderated, yet rents keep escalating.  The other pouint is that sub prime lenders have largely left the market, and the mainstream banks have tightend up their lebding criteria significantly.

If you’re employed and don’t have savings history with at least a 5 per cent deposit, you’ll find it hard to qualify for a bank loan.  If you’re self employed you’ll find it even harder.  If you don’t have solid income proof you’ll need a 20 per cent deposit.  You’ll also likely be required to have an ABN for at least 2 years.  Plus you’ll probably need to produce BAS and bank statements.  And any black credit marks - no matter how minor - will result in your application being rejected.

On the other hand, the rent buy arrangement may well be a good option for you.  Reduced red tape and flexible deposit arrangements, make it a far more do-able option for intending house buyers.

Go to Home Buy Express for more info then give us a call on 07 3260 7273, and see if this could be a good fit for you.

conidtions are good to be

In an article in The Australian recently it was stated that the worst of the real estate slump in Australia is almost over.  The article stated that the main reasons for this is a combination of low interest rates, and an undersupply of houses.

A lot of publicity has been given to the property crash in the US.  Reasons given for the US crash are:

• Significant mortgage defaults
• Massive overbuilding of houses - as a result of low interest rates and lax credit standards.
• Severe recession - due to the unravelling of the banking system.

Compare this to Australia.  We have probably the strongest banking system in the world.  Our default rate is far lower than in the US.  Credit standards in Australia have always been more stringent, even in the sub prime sector.

Finally, we didn’t experience an overbuilding situation.  In fact we have a shortage fo housing due to various factors not the least of which is to do with government intransigence re land supply and fees charged to devlopers.  The other key reason is to do with immigration which has been moving upwards in recent years.

But the situation could not be more different in Australia.

I recently wrote a post about Darren and Alicia from Gympie. Last year Home Buy Express helped them into a home on a rent buy basis.  Last week they sent us photos which show before and after shots of the kitchen. Following are photos showing us the changes they have made.

First up we have the definitive BEFORE photo.  Spot the difference! Note the old style timber paneling. So seventies!

Here are some AFTER photos.  First one is a photo showing the kitchen from the lounge room………….

And another one of the breakfast area…………

And finally the full AFTER kitchen shot…………….

We helped a lovely couple in Gympie, Darren and Alicia, into their own rent buy home last year.  Darren and Alicia had spoken to us at Home Buy Express a couple of years ago, but at that time were not ready to take the step into home ownership (they had to clear some debt first).   But they gave us a call about 8 months ago - and were now ready.

Once we approved them they started to search for houses.  Within a few weeks they had organised for us to look at a few houses they liked.  So we drove up to Gympie (from Brisbane) to do some inspections.  Darren and Alicia’s fav house was a very cute worker’s cottage that had been made over in a nice way.  So we put an offer on the property.  After a lot of argy bargy we got the price down to close to the level we were looking for.  We thought we had the deal set, but at the last moment, someone else snapped it up.  Back to the drawing board!

Another couple of weeks elapsed before Daren and Alicia found some more houses to inspect.  So, up we drove again - and bingo!   We found ‘the one’.  It was another cottage, partially renovated.  The vendors were highly motivated to sell, as they had another house they were buying.  Time was of the essence.  So we made them an offer they couldn’t refuse!  And they didn’t.

Fast forward to now, and this partially renovated house is being transformed.  Last week we received photos from Darren and Alicia.  All I can say is WOW!  The photos are being scanned and will be included in my next post in a few days.  Look out for it.

I have a friend in Victoria who has done a rent buy deal.  He did it with style.  He found a property on the expensive and desirable Mornington Peninsula.  Right on the water - wow!

The property was for sale but my friend couldn’t quite put the ‘readies’ together to buy it in the normal way.  So he made the vendor an offer he could not refuse.  He said he would buy it  from him on a delayed basis (that is, rent buy).  He would give him a set price now, plus he would pay higher than market rent.  The seller, after some thought, came back to him and said ‘yes’.

This property has development potential, so my friend is in the process of organising a development application.  He plans to clean up on this deal!  See what you can do?

Mark and Kay are living in one of our houses under a rent buy arrangement in the suburb of Rochedale on the south side of Brisbane.  The house is a standard 70’s style highset brick.  The house was bought for them by one of our j-v partners 3 years ago.  During that time, they have made an incredible difference.

First up they ripped out the ghastly yellow/orange glass at the front of the house, and replaced them with modern glass panels.  But that was just the start.  They have completely renovated the interior of the house.  Out went the old style kitchen with laminate everywhere.  In went a modern Euro style creation.  Same with the bathroom.  Downstairs they have built a home theatre room.  Fab.

Still more work is needed, including rendering of the outside, repair of the cracked swimming pool, and landscaping.  This is probably the best example I have seen of a rent buy tenant taking ownership of the property and transforming it.  It does your heart good, and maybe you would like to become another Home Buy Express success story.  If so, call us on 07 3260 7273.

Note: photos of the renos will be made available soon!

There are plenty of advantages of rent buy or vendor finance programs, such as a proven pathway to home ownership for people who cannot yet qualify for traditional bank finance.  Having the freedom to decorate and improve the property (and gain financial benefit from doing so!) are also major pluses.    And then there is the peace of mind that comes from KNOWING that you cannot be moved on when the landlord sells the property.  In other words you have security of tenure.

But what of the downside?  Well, if you listen to the critics they’ll tell you about the horror stories of people who entered into one of these arrangements, only to find the owner/seller reneging on their part of the deal.  They’ll tell you that you have no security because the title is in the vendor’s name until you get your bank finance in place - and this could take many years.

But in our 8 year experience at Home Buy Express, these arrangements work very well in the vast majority of cases.  Certainly we have had no instances whereby one of our investor partners was unable to settle the transaction with the buyer when the time came.  So I guess the real answer to this perceived pitfall is to only work with rent buy businesses that have the runs on the board.  Simple.

If you’re a tenant the news is not good.  Rents are on the up and up.  I saw the news the other night and for Brisbane, home unit rents have increased by 14 per cent in the last 12 months.  Wow!  And it looks like there’s more to come, because the banks aren’t lending as much, and there aren’t as many buyers around.  The effect of this is that more people are renting - which forces rents up.

Perversely home owners with mortgages are seeing their housing costs plummet, with interest rates dropping like a stone over the last 4 months.  And according to most economic commentators, there’s more rate drops to come.

So the key is to make the commitment and join the ranks of home owners.  Prices have come down a little too, so the timing is good.  Of course if you don’t fit the square, the banks are probably going to show you the door.  That is why home purchase alternatives such as rent buy are so appropriate in today’s economic environment.