Can you safely sell your house and rent it back?

Schemes that allow homeowners to sell their property and then rent it back are often called sale and leaseback or buyback schemes. Simply put, the property owner sells the house and then continues to rent it to the new owner. This means that the house will no longer be yours, but you will continue to live in the same house without being forced to move.

A major contributing factor as to why people choose this type of scheme is that of financial pressures. Although we have become accustomed to many luxuries and a certain way of life, this has not eased the pressure on our pockets! In fact, many homeowners feel more of a rush today than they did years ago. These financial difficulties affect a large majority of the population and can make it difficult or impossible to continue making monthly mortgage payments.

When a homeowner can’t pay their mortgage, for whatever reason, there is an instant concern that the bank will “knock on the door.” Rather than become homeless, these distressed property owners choose to sell their property. By choosing to sell and re-rent the property, rather than just sell it, all the hassle of packing up and moving is removed. There’s no need to downsize, pay professional movers to haul your prized possessions, or frantically search for a home you can afford. Selling your home and trying to find a new place to live while handling your usual daily responsibilities is not only stressful and exhausting, but also unnecessary. Plus, when you sell your home, you’ll enjoy instant financial relief and can use the funds to pay off your other debts or perhaps finance another investment.

It is important to note that such schemes are run by individuals and private companies. As with any financial decision, it’s best to take time to consider all of your options and read all of the fine print in the agreement before you sign it. Try to check with at least three different people or companies who are willing to offer this scheme and don’t be afraid to get legal advice to make sure the terms are in fact legitimate. An independent financial advisor will be better equipped to outline your various options after considering your financial situation. It is important to seek this type of advice and ensure that selling and renting out your property is the best option.