Lease Option
- Thread starter rodimus
- Start date
Paul thanks.
1.I guess my question re the bank loan is, when the bank evaluates your assets n serviceability , will they look favorably on your lease options assets? Technically the title still under your name, you get more rent in each week, that means u can borrow more for your other deals? Is this one of the benefit of doing this type of deal?
2. Also I was thinking we have to make sure the weekly payments covers council rates, strata, all other rates, since you are still paying on the buyers behalf since the property still in your name. If we let the buyer be responsible for prying rates etc, they may end u not paying n them u get into trouble or lose your property.
3. How do u determine if the buyer has default on the lease option contract? When is the time that u can tell the buyer that he has defaulted n his lease option is no longer valid. If he misses how many payments?
1.I guess my question re the bank loan is, when the bank evaluates your assets n serviceability , will they look favorably on your lease options assets? Technically the title still under your name, you get more rent in each week, that means u can borrow more for your other deals? Is this one of the benefit of doing this type of deal?
2. Also I was thinking we have to make sure the weekly payments covers council rates, strata, all other rates, since you are still paying on the buyers behalf since the property still in your name. If we let the buyer be responsible for prying rates etc, they may end u not paying n them u get into trouble or lose your property.
3. How do u determine if the buyer has default on the lease option contract? When is the time that u can tell the buyer that he has defaulted n his lease option is no longer valid. If he misses how many payments?
Just think of it simply. All they have is a lease. They are tenants and there will be a lease in place. They must keep the terms of the lease.
They also have an option to purchase with an option agreement. To take the option they must keep to the terms of the agreement which would include paying the rent on time and also notifying the owner that they wish to exercise their option within the required time period.
Hi Rodimus
1. Rule one - unless you are talking with the commercial department of a bank (traditional lender) after building up a successful VF business, don't mention vendor finance.
2. We never let VF buyers pay these bills. We pay them but there are mechanisms to ensure the VF buyer pays.
3. I they fail to do what they've agreed to do under the documentation involved. Regarding payments, the various State Residential Tenancy Act stipulate when a tenant is in default and, for an Instalment Contract, the National Credit Code has its own set of rules.
Cheers, Paul
1. Rule one - unless you are talking with the commercial department of a bank (traditional lender) after building up a successful VF business, don't mention vendor finance.
2. We never let VF buyers pay these bills. We pay them but there are mechanisms to ensure the VF buyer pays.
3. I they fail to do what they've agreed to do under the documentation involved. Regarding payments, the various State Residential Tenancy Act stipulate when a tenant is in default and, for an Instalment Contract, the National Credit Code has its own set of rules.
Cheers, Paul
