Offer Lease to purchase.
Lessor: Current landlord
Lessee: Areton Ltd or Andreas Investments Ltd
Monthly guaranteed lease payment 550 Pounds
Purchase price 130k in 10 years from the beginning of the lease
Based on a outstanding 75000 loan secured on the house from Lloyds bank and a typical interest rate of 4% on buy to let mortgage the the interest on the loan is 250 GBP monthly.
Monthly gains 550-250=300 GBP per month guaranteed on the lease agreement. This translates into a guaranteed earning of 3600 per year. Based on a 10 year lease this it 36000 pounds earning from the lease payments. Please note that this earning is completely passive as no obligation, liability or responsibility is taken by the lessor.
Based on a purchase price of 130 K the further gains would be of 10000. This would be tax free as todays’ tax law.
This leaves a total of 46000 thousands for the lessor. This gain occurs without any expense from the lessor as all the responsibility are passed on the lessee.
This is the equivalent of a gain you would made on a sale of a sale of 166K but without all the capital tax gans you would incurr in such a case. Also note that our due diligence suggests this level of sale is unlikely at this current prices.
Tax advantageous as the earnings are very likely higher than most other sales options and they are spread over a longer period of time and therefore likely to incur in little or no tax depending on the circumstances of the lessor (seller).
Costs of the transaction.
All future costs are borne by the lessee.
Lease agreement including legal representation for both parties ranges from 1000 pounds to 1500 pounds. This is borne by the lessee
All legal costs of the future purchase are borne by the lessee, this includes sellers legal fees.
HMO license will be passed on to the lessee as well as all future renewals.
Insurance to the building will be borne by the lessees. All maintenance will be borne by the lessee
All liabilities and legal responsibilities in connection to the building will be passed on to the lessee. No Further responibility ofs borne by the current landlord.
The advantage of this option versus a normal auction sale or other sale:
Typically far higher gains to the seller. This is because of the different nature to the agreement.
No further costs
Like another sale the future purchaser will take full responsibility of the property from the beginning of the lease.
Survey to be carried out at the lessee’s cost on the week commencing the 25th of November.
Contract drafting an on the week commencing of the 2nd of December
Lease completion on the week commencing on the 9th of December 2019.