Schemes that allow homeowners to sell their property and then rent it back are often referred to as sale-and-lease-back or buy-back programs. Simply put, the owner sells the house and then rents it out to the new owner. This means that the apartment no longer belongs to them, but they continue to live in the same apartment without having to move.
A major factor in why people choose this type of system is financial pressure. Although we have become accustomed to many luxuries and a certain way of life, this does not relieve our pockets at all! In fact, many homeowners today are feeling a bigger pinch than they were years ago. These financial hardships affect a large majority of the population and can make it difficult or impossible to continue making monthly mortgage payments.
If for any reason a homeowner cannot afford to pay their mortgage, there is an immediate concern that the bank will come knocking. Rather than remain homeless, these struggling property owners are choosing to sell their property instead. By choosing to sell and rent back the property rather than simply selling it, all the hassle of packing and moving is eliminated. You don’t have to downsize, pay professional movers to move your valuable belongings, or desperately search for a home you can afford. Selling your house and trying to find a new place to live while going about your usual daily chores is not only stressful and tiring, it’s also unnecessary. What’s more, when you sell your home, you’ll enjoy instant financial relief, and you can use the money to pay off your other debts or maybe fund another investment.
It is important to note that such systems are operated by individuals and private companies. As with any financial decision, it’s best to take some time to consider all your options and read the fine print in the agreement before signing. Try to consult with at least three different people or companies willing to offer this program and don’t be afraid to seek legal advice to make sure the terms are indeed legitimate. An independent financial advisor is in the best position to outline your various options, taking into account your financial situation. It is important to seek such advice and ensure that selling and renting back your property is indeed the best option.