Hi, been reading on here awhile and finally registered anyways I have read somewhere about buying property of a pensioner at todays sort of prices and they stay on for free for as long as they like at which time settlement could take place in a.week a year or 10 years anyways I think I have opportunity to do this in west Footscray, Melbourne I own the house opposite which I'm renovating for sale and sub dividing back atm. House prices in street are around 700k. The old lady opposite me who I have known of along time growing up but only since getting opp property been helping her with some minor repairs and company as she knew my grandparents and realised she doesn't have any family and can't afford new false teeth etc and home needs fair bit work. She is in her early nineties. Was considering offering her a couple hundred thousand in cash for house and I will fix replace or renovate whatever she wants? That way she stays there free, I have no mortage repayments, and she can enjoy her life with the cash? Has anyone had any experience with this would have to be drawn up correctly but seems to make sense to me otherwise will end up with state trustees one day I'm guessing
buying property of pensioner at todays prices
- Thread starter KQ8
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Ok well under renovated houses aren't 700k closer to high 400 or low 500 so yeah 200 -300 k for a run down house that I might not have settlement or any return on my money for quite likely say 5 years and she could actually enjoy her life rather than living below the poverty line. Like I said the house will end up with state trustees and she won't get any of it if she doesn't have an opportunity like this.
Hi yeah if she had family I wouldnt be wanting to buy the house as I know it would be left to them. I think she is probably past reverse mortgages and I just think her life would be a little more comfortable being able to get a few things she needs or needs done, even having someone to come in and clean or getting taxis instead of the bus
Well unfortunately having left my job recently last week thats all I can offer as I won't be able to get a loan until I can prove income through sole trader etc which will take a little while. If she doesn't want to do it she doesn't have to. It's just an option. She is 91. Last month I bought a house at Less than 50 per cent under market value and I don't have to sit around for 5 years for settlement or any income or return that one will return 450 -480 a week when the repayments are 140 week. So what I'm saying is there are opportunities to by property well under value and get a quicker return so me tying up all my available cash on something like this when I could probably make the same sort of money with those few hundred thousand over the next say 5 years. She tells me she wished she had a son like me for all I know she may leave the house to me I don't want to take it for nothing one day and she gets nothing out of it I'd rather her life to be a bit easier. Sorry I'd rather sit there and watch a tv screen that was actually big enough to see rather than a crappy little box tv she can't really see.
If you really care about her, why not get an appraisal, buy it at market value (taking into account its condition) and offer her full price, and she can use some of the funds to rent back from you.
I couldn't sleep at night taking advantage of an old person, or any person in such a situation.
I couldn't sleep at night taking advantage of an old person, or any person in such a situation.
I can see where you are coming from. I would not have an ethical objection, IF you make the lady fully aware of the situation. i.e:
Explain that she could get more on the open market, potentially enough to move into a luxurious care facility, which she may prefer than staying at home, as she ages. I think you should help her organise an appraisal, in the spirit of transparency.
Explain that you would likely be making a significant profit when settlement occurs, and is she comfortable with this?
Explain that this deal would mean she would have no asset to leave to anyone. Most people have at least one distant relative that they would be leaving their assets to. It may be that it would go to the public trustee, but ask her that first.
If you are satisfied that you've received a rational agreement on the above, from a person that you believe to be able to make a rational decision, then you have my ethical tick of approval.
The people on the forum don't know you, and don't know whether you are an ethical person or a sociopath, so it's difficult to seek this type of advice here.
Matt
Thaunt way I see it maybe. In a few years it will get closer to market value when it's sold off down the track but unfortunately she wouldnt see a cent of it then. I know what I'd rather do if I was her. Rent free for 5 years for instance would add up closer to market value. Like I said money is no good to her in 5 years and she knows I would renovate her house back to its former glory. I wouldn't think she would change her living habits to much with a few thousand I would be surprised if she burnt through much of it actually so I'm sure the government would still get to take what she may not use the choice is hers it's just an option I thought of if she doesn't want to do it then fine by me not going to stop giving her a hand. As a police officer for past 10 years up until a week ago now that I'm on 6 months unpaid leave to test concentrate on my properties for a living take offence to those who think I'm just I'm it to take advantage of am old lady.
In some countries there's a type of purchase whereby the buyer pays a life annuity (possibly in addition to a down payment) to the seller until the latter dies by which time ownership is transferred.
A bit of a gamble, especially for the buyer. Good for the seller who can stay in the property and is assured of a regular income until death. But good also for the buyer who will feel it very much like vendor finance + the possibility of a windfall if the seller dies prematurely.
Anyone knows whether this type of arrangement is possible in Australia and how it is called?
A bit of a gamble, especially for the buyer. Good for the seller who can stay in the property and is assured of a regular income until death. But good also for the buyer who will feel it very much like vendor finance + the possibility of a windfall if the seller dies prematurely.
Anyone knows whether this type of arrangement is possible in Australia and how it is called?
The David Tweed principles of real estate. A cop should know better. On her death her family would likely argue she had diminished capacity and you are a rogue. Maybe State Trustees might do it. They ask court to rescind the contract. What title would you have then ? Win or lose the legals will send you broke.
Centrelink require disclosure of sale of an exempt asset and triggers a review of assets and income test. It could be a deeming asset if its sold under market so your lowball offer might actually harm her more than you think. Age care ACAT would also trigger comprehensive review. That a very high and probable risk. And her family would be fully aware. What lawyer would she use ? Yours ? LOL.
Isnt her other option to sell the property and use cash to have a life of comfort in a quality facility of her choice with support and care provided. Self care, low care or in time high care. All her $ would be hers. Thats what a good neighbour should suggest. You might discuss her aged care options so she is financially secure. Then if she chooses to sell at market you can consider bidding.
Have a good hard look in the mirror. There are others you can steal (sorry benefit)from...Not your neighbour.
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The french have this system and I've been loooking at it for a while, its a pretty good asset for your super I reckon. I just need to learn french and have a very good understanding of the french market before I make the leap.
google "French Viager", this site is pretty good
http://www.paris-viager.com/
Essentially you purchase the property at a steep discount sometimes 30% of the purchase cost. They get to live in the property for the rest of their lives and you pay them a monthly rent indexed to inflation
The purchase cost and monthly rent are determined by how old they are and what you can negotiate.
If they die before their life expectancy you get a bargin if they live too long it ends up costing you more.
Ther french do it because of inheritance taxes mainly.
google "French Viager", this site is pretty good
http://www.paris-viager.com/
Essentially you purchase the property at a steep discount sometimes 30% of the purchase cost. They get to live in the property for the rest of their lives and you pay them a monthly rent indexed to inflation
The purchase cost and monthly rent are determined by how old they are and what you can negotiate.
If they die before their life expectancy you get a bargin if they live too long it ends up costing you more.
Ther french do it because of inheritance taxes mainly.
I think we should give the OP the benefit of the doubt as to his intentions.
As regards the deal- perhaps the best way to decide if it is a fair one is how would OP feel about it if his elderly mother or grandmother entered such a deal with their neighbours.
OP should just bide his time and help her out- not for a benefit but because he wants to.
When she goes to a better place don't be surprised if the family offer it to you before going to the market at less than market price as a thank you for wheeling the bins in etc.
I quite literally had this happen to a client of mine yesterday as I prepared a purchase contract to buy from the trustees of the estate. No agents involved.
As regards the deal- perhaps the best way to decide if it is a fair one is how would OP feel about it if his elderly mother or grandmother entered such a deal with their neighbours.
OP should just bide his time and help her out- not for a benefit but because he wants to.
When she goes to a better place don't be surprised if the family offer it to you before going to the market at less than market price as a thank you for wheeling the bins in etc.
I quite literally had this happen to a client of mine yesterday as I prepared a purchase contract to buy from the trustees of the estate. No agents involved.
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