Hi all,
I was watching a doco yesterday called "the truth about property" and it showed a business venture/model that is proving to be rather contentious in both the UK and the States.
Basically, a company is set up and then advertises to buy properties from people that are under financial hardship - ie cannot pay their bills and/or cannot meet their mortgage repayments. Then when this company buys the properties, they turn around and rent or let them back to the previous owners (so that the people concerned do not have to move out of their beloved home).
But the thing is, the company buys the properties under market value and re-lets them back at either below market value or at market value.
The good thing is that the punters do not "loose" their family home and that they can stay there instead of the threat of being put out onto the street when the bank forecloses on their homes. the bad thing is that the punters have lost their family asset.
From this company point of view, they may be helping these desparate families by allowingthem to stay in the family home, but their primary motive is acting like vultures and getting family properties under market value and basically, building up a portfolio from people who are under financial hardship.
So what is the consensus on this business model? Is it a good way to conduct business or is it morally wrong?
Anyone aware of anyone doing something like this in Australia?
To be honest, i really don't know if this is the type of business that i would like to be involved in. On one hand, yes you are building up a portfolio at below market rates, but on the other, you are taken advantage and profiteering from people who are in a financial mess. This could be something that the folk at TT could go to town and chase you with.
I understand and that many companies do this on a corporate level and business in many ways is about taking advantage of other people - but is the business model described above morally kosher or not?
Thanks
g
I was watching a doco yesterday called "the truth about property" and it showed a business venture/model that is proving to be rather contentious in both the UK and the States.
Basically, a company is set up and then advertises to buy properties from people that are under financial hardship - ie cannot pay their bills and/or cannot meet their mortgage repayments. Then when this company buys the properties, they turn around and rent or let them back to the previous owners (so that the people concerned do not have to move out of their beloved home).
But the thing is, the company buys the properties under market value and re-lets them back at either below market value or at market value.
The good thing is that the punters do not "loose" their family home and that they can stay there instead of the threat of being put out onto the street when the bank forecloses on their homes. the bad thing is that the punters have lost their family asset.
From this company point of view, they may be helping these desparate families by allowingthem to stay in the family home, but their primary motive is acting like vultures and getting family properties under market value and basically, building up a portfolio from people who are under financial hardship.
So what is the consensus on this business model? Is it a good way to conduct business or is it morally wrong?
Anyone aware of anyone doing something like this in Australia?
To be honest, i really don't know if this is the type of business that i would like to be involved in. On one hand, yes you are building up a portfolio at below market rates, but on the other, you are taken advantage and profiteering from people who are in a financial mess. This could be something that the folk at TT could go to town and chase you with.
I understand and that many companies do this on a corporate level and business in many ways is about taking advantage of other people - but is the business model described above morally kosher or not?
Thanks
g