I just received a phone call from a potential "buyer" of a property we have listed for sale. He wanted to rent the property for 5 years with an option to buy anytime within that 5 years for a price based on today's market conditions.
I told him this was a terrible deal for our seller. In essence, anytime the buyer/renter felt the property had appreciated enough in the next 5 years, he could buy it and then flip it (sell it immediately) for a profit. The only possible benefit of this deal for a seller is rental income for 5 years.
If the price of the property stayed the same or decreased over the next 5 years, the buyer/renter lost nothing, as he just didn't exercise his option to buy and walked away from the proeprty. If the price went up, he got to take all the profit.
From my sellers point of view, the seller had all downside risk and no upside price potential. Terrible deal for the seller. Great deal for the buyer, if he could talk some sucker into taking it. Bob
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