tiga,
This is not a commonly used strategy in Australia.
I am not aware of any companies who structures deals like this for investors. However I am aware of a few individuals who have done deals like this once or twice.
From my experience this type of deal is generally seen in Australia as predatory - you are buying a property under market value from poor old people...It's particularly predatory if the person dies early & you simply take vacant possession or the person outlives the calculated period & can be thrown out of the home (though I know Cavendish doesn't structure it this way). This is not to mention issues with beneficiaries!
There are structures existing for people in this situation where they can keep control of their asset. By taking out a loan over their property & using the loan to buy an annuity it's possible for people with a great deal of equity in their home to convert a manageable proportion of it into tax-free income (except for the interest received from the annuity).
Also many older people in this situation are able to sell their property at market, buy up the coast for a fraction of the value of their property and live off the difference. This has become a massive movement in Australia over the past 10 years & is still growing in size.
Equally many people sell their home and move into a retirement village of some description & level of service...which may be very similar (but slightly more serviced) than the scenario above.
The people most likely to be interested in selling via this type of deal are those whose properties who have not realised much CG over the past 10 years - ie the properties are in undesireable areas....you may not realise a decent profit level moving forward.
So good luck finding appropriate deals. I'd suggest that you do a LOT of research in the Australian market before looking at any of this type of deal.
If Cavendish averages 1 listing from every 87 enquiries you may find you need to go through the process a lot of times in Australia as well to find one deal & this could make it cost prohibitive if doing it yourself. The people I know of who have taken this approach (well slightly different approach actually) advertised via classified ads directly.
Cheers,
Aceyducey
