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I could probably guarantee you guys this idea is not originally and has been done before by other land lords before me.
but how is it different to:
- Developer offering temporary rental guarantee (at rate above market price)
I did speak with my solicitor today and they pointed out the following scenario's if the purchaser wanted to rescind the contract or sue for damages:
- No normal lawyer would take this case on as the "fraud" amounted to $7,500. The legal fee's alone would be more than the $7,500.
- If it did get to court the courts will look at the purchaser and say:
Are you a prudent investor? the purchaser will say "yes" then the court would say you should have know the rent was inflated and cannot rescind the contract.
-
Overall its a low risk play with regards to litigation.
Looks like some of you are taking the moral high ground, a bit rich coming from a bunch property investors.
Honest Property Investors.Your way we will probably see you on ACA.
^ Difference - it's disclosed. The buyer KNOWS it's a 1 year "temporary" rental guarantee. In the OP position, the buyer doesn't know there is a $10,000 kick back.
End of the day the buyer is not only buying a property, they are buying the tenancy agreement that comes with it as well.
If a buyer does take the bait...then yes you could say the buy should have done some due dilligence...but in this case the seller has gone out of his way to hide the fact and gone out of the way to scam some unknowing buyer.
Looks like your lawyer is paving himself for another "lawyer's fee"/ case...
...omg
And what happens if they say no...most prudent or experienced investors ( if not all) will def check on market rent and market asking price. The only type of investors i know that may fall for this "scheme" would be first time investors, how would your so court look at this now...
---
you walk away with $30k...and a young investor walks away with a scattered dream and a bad start.
See, there are two parts to litigation. One is winning or losing the action. The other is paying the money to play the game. You might win, but only after spending a lot of your own money.
You might think the risk of losing is low, but you still have to pay your legal fees and put the time and effort into the defence.
Consider also that of this happens and it goes to court, your ruse will be made public -- it's likely be all over the media -- and getting a second buyer at any price will be hard.
But you seem to have worked it all out yourself.
Someone who knows anything about property would know that when you receive rents in excess of $600+ you are buying and selling between seasoned investors. My property is in the $800+ bracket unless there are some trust fund babies running around then I doubt that I am selling to first time investor.
If I were to think my risk of losing are low then the risk of the other side losing would be high. Unless they are rich and want to prove a point then any self respecting lawyer would advise their client to not take this case to court as there is a high risk of them losing.
Someone who knows anything about property would know that when you receive rents in excess of $600+ you are buying and selling between seasoned investors.
Looks like some of you are taking the moral high ground, a bit rich coming from a bunch property investors.
Looks like some of you are taking the moral high ground, a bit rich coming from a bunch property investors.
Most would take the yield into consideration. Would have been better written as: How many residential investors are swayed by a properties yield WITHOUT checking market rent for comparable properties in the area?I would be interested to know if ANY residential landlord was swayed in their decision to buy a house due to the rental achieved?
Most would take the yield into consideration. Would have been better written as: How many residential investors are swayed by a properties yield WITHOUT checking market rent for comparable properties in the area?
But look at the number of people buying overpriced properties with developer guaranteed rental income... there would definitely be a few who don't do their homework. As said earlier in the thread it only takes 1 foolish "investor" to buy.
I would be interested to know if ANY residential landlord was swayed in their decision to buy a house due to the rental achieved? It is something I would not consider at all. I look at the house itself, the area, how it compares to other houses I know, already own, or have looked at.
If that all stacked up and the rent appeared to be too high, I would smell a rat. There is a house in my street owned by friends so I know what rent they get, and it has always been much higher than I would have thought possible (due to number of bedrooms and layout that enabled good separation for big families). They tried to sell it a couple of years ago for "market value" at the time, and it didn't sell. The very high rent didn't sway anybody to pay even what seemed like a reasonable price back then. It would make me want the house for the price it is worth, but not a penny more.
Dishonest and you reap what you sow.I plan on selling my investment property within the next 3 months and my property is about to become vacated. It will most likley be purchased by another investor so is it worth me giving the next tenant a 12 month lease and $10,000 via a private deed in exchange for lifting the rent $150 extra over the market rent. The $7,500 will cover the increase and the other $2,500 will keep the tenant quite during the marketing process.
Looking at comparables this should easily add an extra 30k-50k in value.
I was wondering if this is illegal as this practice always goes on in commercial property.
Thanks