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The house next door to me has renters with a lifetime agreement. Yep, they can stay there for their life, and the rent is fixed at $600 a month. It does not even cover maintenance, repairs and the taxes! And one could rent the house for almost 3 times that amount!
Has to be a family member or friend that they were doing a favor for or owned by a non profit. I guess there are loopholes and if they don't fix repairs you can toss them out, but they would be crazy to give up a 1/3 cost rental and not do the repairs.
What gives with this?
If I bought the house, who are they to tell me that I couldn't live in it? If there were renters, couldn't you just tell them to get lost?
The only thing I could imagine is that it's rented to a Section 8 person, my understanding is if they continue to pay and are not a problem it 's almost impossible to get them out.
Otherwise the listing should say as others do that there is a lease in place until a certain date.
I would assume there is a lease situation that would preclude financing. Most mortgages are for owner-occupants only. Anything over a few months left on a lease with a tenant who is unwilling to leave early, would not be financable.
There is such a thing in Real Estate as a life-tenancy. No idea if that is what is in place in the example above....
I would assume there is a lease situation that would preclude financing. Most mortgages are for owner-occupants only. Anything over a few months left on a lease with a tenant who is unwilling to leave early, would not be financable.
There is such a thing in Real Estate as a life-tenancy. No idea if that is what is in place in the example above....
But you can pay cash and not live there according to the listing. that has nothing to do with the financing part.
But you can pay cash and not live there according to the listing. that has nothing to do with the financing part.
If there is a lease, the new owner will have to try to work a deal or evict the tenant.
These are marketing remarks on a listing... I wouldn't consider it them the whole and complete picture of what someone might be able to work out with enough time and money. The listing agent just didn't want to field calls from a lot of people who would need traditional financing. He/she is looking for investors who want a rental.
Last edited by Diana Holbrook; 05-12-2018 at 10:29 AM..
If there is a lease, the new owner will have to try to work a deal or evict the tenant.
You cannot evict a tenant with a valid lease if the tenant has done nothing wrong. You can't just evict because you want to. They have a legal lease, and the lease must play out.
What happens to a renter when the landlord loses the house due to repossession? Will the "bank" continue to allow the renter to stay until end of lease? If so, will the bank do repairs as needed, fix the roof when it leaks, replace the HVAC system? Just curious how that works.
However, a lease may make a property easy to sell.
Example 1: A home owner wanted to use the equity in his home to fund a change in his business, but wanted to keep living there. We put a good solid 5 year lease on the home, with the leasee to do all maintenance and upkeep. Lease to adjust up, if taxes went up. Then the home was sold to someone that wanted to live in the home in 5 years when they retired. They were buying now, to get today's prices. The seller got the money to use now, while fixing his lease payments for a home for his family. Both were extremely happy with the arrangement.
Example 3: I had an office building built for a doctors office, with 4 rentals. The doctor wanted to retire in 20 years when he reached 55 years old. The doctor took 6 home equities as the down payment on the building. His building costs were all deductible each year. He leased the whole building, and could control who the tenants were, and over time, the rent increases brought in a nice little income. The 6 homes brought in a small cash flow which was more than the interest paid, and he had his owner benefits on those homes, and it actually cost him less monthly than if he had kept the building and the tax benefits were much better than if he had kept owning his office building. The net appreciation was better on the investment properties. We later used the 6 homes as a down payment on a very good income property. He was far ahead, of where he would have been if he kept owning his office building. At the end of 20 years, the lease ended on the same day he moved out and retired. The owner of the office building, was an American working overseas, and it was a worry free investment, with nothing needed on his part, but to get the rent sent to his bank every month, and could quit paying management fees he had been paying on the home.
The properties like the one in this thread, are often bought by investors, who love a good lease longer the better, with a proven good tenant/tenants.
What happens to a renter when the landlord loses the house due to repossession? Will the "bank" continue to allow the renter to stay until end of lease? If so, will the bank do repairs as needed, fix the roof when it leaks, replace the HVAC system? Just curious how that works.
They would be subject to the same laws as any other owner... but they are known to offer "cash for keys" - even for the prior defaulted owner, to encourage them to leave.
If there's rent-paying tenants, they'd actually be better off than most foreclosures that often get trashed and abandoned for a year or more waiting or process and bureaucracy to play out. Properties suffer without people in them. At least in this climate.
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The listing agent just didn't want to field calls from a lot of people who would need traditional financing. He/she is looking for investors who want a rental.
