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  1. #1
    Join Date
    Mar 2007
    Location
    Christchurch
    Posts
    48

    Default Lease Options - High End - in this Market

    Hi
    I haven't formally been to a course on LO's but do they work at the top end of the market?
    We are thinking of doing it on our home and we worked out that the tenant buyer would have to pay around $778 pw if we were to lock in some equity in 4 yrs time.
    That's seems very high and am skeptical that there would be punters out there particulary in these economic times.
    What's the ticket? Good marketing?
    Cheers
    Jane

  2. #2
    Join Date
    Aug 2005
    Location
    Auckland
    Posts
    236

    Default Jane

    What is High end

    HTML Code:
    I haven't formally been to a course on LO's but do they work at the top end of the market? 
    We are thinking of doing it on our home and we worked out that the tenant buyer would have to pay around $778 pw if we were to lock in some equity in 4 yrs time.
    sounds high

  3. #3
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    Hi Jane, the short answer is yes. I have TBer's paying up to $850 a week.

  4. #4
    Join Date
    Dec 2004
    Location
    Beautiful Waitakere Ranges
    Posts
    519

    Default

    I had one going at $800/wk, and they liked it enough to buy me out after just 3 months. A pity since it was great cashflow, but good on them.
    High resolution Fractal Art on quality canvas: www.FractalArt.co.nz

  5. #5
    Join Date
    Oct 2008
    Location
    Auckland/Melbourne/ whereever the money is
    Posts
    1,380

    Default

    Would you mind sharing the numbers on that one Rolf ?
    particularly the sell price

  6. #6
    Join Date
    Nov 2003
    Location
    Auckland
    Posts
    524

    Default

    Yes, they can work but the market is a lot thinner. You need to factor in the down side - what happens if they lose a job and bail? How long would it take to find someone else?
    Much safer at lower levels, especially starting out.

  7. #7
    Join Date
    Dec 2004
    Location
    Beautiful Waitakere Ranges
    Posts
    519

    Default

    Quote Originally Posted by Keithw View Post
    Would you mind sharing the numbers on that one Rolf ?
    particularly the sell price
    Purchase price: $357k
    Weekly expenses: ~$600
    Weekly LO payment: $800
    Weekly credit: $100 (as I remember)
    Sell price: $375k

    This was a 4brm 1950's house in West Auckland
    High resolution Fractal Art on quality canvas: www.FractalArt.co.nz

  8. #8
    Join Date
    Oct 2008
    Location
    Auckland/Melbourne/ whereever the money is
    Posts
    1,380

    Default

    Thanks for that Rolf.
    As I figured, your 800 a week was for a 375k place.
    Much above this (maybe to 450k or so)& I don't think it works too well.
    I looked at it for one of my 650k places & with just the holding costs being 1200 pw before any margins or anything, it makes the weekly LO payment way too high for most.

    I can see why your tenants would be happy to be paying the 800pw as it's not much more than they would have to pay on a mortgage.

  9. #9
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    LO's should be at or below mortgage payments given that the TBers will usually be credit impaired.

  10. #10
    Join Date
    May 2007
    Location
    Chch
    Posts
    773

    Default

    Quote Originally Posted by jane View Post
    Hi
    I haven't formally been to a course on LO's but do they work at the top end of the market?
    We are thinking of doing it on our home and we worked out that the tenant buyer would have to pay around $778 pw if we were to lock in some equity in 4 yrs time.
    That's seems very high and am skeptical that there would be punters out there particulary in these economic times.
    What's the ticket? Good marketing?
    Cheers
    Jane
    Think you'll struggle in Christchurch Jane, we've got them up to $600 but under $500 is a lot easier. Eli


 

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