Hi all,
I have a house that I built 4 years ago for 190,000 including land.
It is worth about 260,000 - 270,000 now. I calculated the capital growth is about 18,500 per year increase.
I owe 170,000 to the bank, paying $1200 per month at 6.7%.
I want to do a lease option.
1) How do I set the sale price for 3 - 4 years down the track? Say if we have a lease option for 4 years, and depending on WHEN the tenant exercises the option, the house market price is different at different years. Say if the tenant exercises the option at year 2, should the purchase price still be based on the 4 year projection? Or have different price level for different time of exercise?
2) How much rent should I charge above market to make sure I don't fall short. I just realize that I am actually giving the tenant/buyer a loan, since I am paying the mortgage to the bank still. So I shouldn't just charge them a little bit above the market rent price which would mean I could be losing out. ALso I still have to be paying the council rates, water rates, park rates, etc.
3) Also, if they have no deposit whatsoever, should I charge more rent per week to cover it?
The area's current rent for 3 bedroom houses is around $300- 330.
Has anyone done lease options before? PLease give me some guidance, thanks v much.
I have a house that I built 4 years ago for 190,000 including land.
It is worth about 260,000 - 270,000 now. I calculated the capital growth is about 18,500 per year increase.
I owe 170,000 to the bank, paying $1200 per month at 6.7%.
I want to do a lease option.
1) How do I set the sale price for 3 - 4 years down the track? Say if we have a lease option for 4 years, and depending on WHEN the tenant exercises the option, the house market price is different at different years. Say if the tenant exercises the option at year 2, should the purchase price still be based on the 4 year projection? Or have different price level for different time of exercise?
2) How much rent should I charge above market to make sure I don't fall short. I just realize that I am actually giving the tenant/buyer a loan, since I am paying the mortgage to the bank still. So I shouldn't just charge them a little bit above the market rent price which would mean I could be losing out. ALso I still have to be paying the council rates, water rates, park rates, etc.
3) Also, if they have no deposit whatsoever, should I charge more rent per week to cover it?
The area's current rent for 3 bedroom houses is around $300- 330.
Has anyone done lease options before? PLease give me some guidance, thanks v much.