Rent Deposit Schemes

MsMolly

been looking at this scheme recently. anyone know anything about them or taken one up. the one i'm looking at is , rent for 18 months, then they'll give you back all your rent to use as a deposit to buy the house. I sick paying dead money, might as well pay it toward something i could own, and i could never safe a deposit. its a vicious circle so i'm thinking this is a way out? i'm going to look into it anyway, have an appointment this aft, but was wondering if anyone had any more details.

Ste.phen

You'll almost certainly be locked into a contract now to buy the place in 18 months at a price they set now.
I imagine the feeling on this board will be that that is a terrible idea, as the place will cost less in 18 months. i.e you'll get screwed on the actual purchase price and won't save any money via the rent.

As for the 'saving' aspect of it, that's up to you to decide on, but overall I reckon it will end up costing you more than if you saved as much as you can for 18 months while renting somewhere cheap.

MsMolly

no, that was the case with some of the ones i looked into but this one is different. if i choose not to buy in 18 months i can walk away if i wish, only losing the rent i paid. the price i buy at today will be the price i pay in 18 months and if the prop is valued lower by and independent valuation, that is what i pay. currently we pay 1200 rent for a 2 bed, whereas this would mean i could get a 3 bed house for 1000 per month and a short commute. i would never be able to save 18 grand in 18 months as i am now. i saw this advertised on the radio and papers and have researched a few and there are some small print on some of them that is open to question but in terms of my location and what is on offer i think the one i'm seeing today looks promising. i'll let you know how i get on. But i'd appreciate your devils advocates comments on the offer. i buy a car because i like the colour, not caring that it has 14 million miles on the clock !
www.saltown.ie

FGR

If you're not obligated to buy and would be getting an independent evaluation at time of purchase I'd say go for it!

I would advise that you're absolutely sure about this t&c's before putting pen to paper, though.

MsMolly

Just to update on my visit.

Went to view anyway and went through all the details as suggested asked a billion questions and scenarios. They actually challenged me to let my solicitor run through the contract to find a catch, cause they claim i won’t find one. That remains to be seen but so far it seems promising.

I went to see showhouse on Sunday and got talking to a couple from Swords who were basically in the same boat as me, renting but wanting to buy but not being able to save for a deposit. One factor was the fact that they’re actually just being built at the minute, ready for the new year, (I was surprised at this, I had it in my head that they were 2nd hand houses but everything is brand new, I get to pick my kitchen and floors.

I put a deposit down 500 squids but I can get that back if I change my mind. I did confirm regarding the price and it is guaranteed against reduction and I’m not signing my life away, if I choose to walk away after 18 months that’s fine. I think it’s a good deal. Brand new house that I live in rent free whilst saving deposit.

Anyway I’m going back Wednesday to get a site visit so I can see the actual house. I’m all delighted with myself now even though know I don’t own the property (yet) but it’s such a relief to me cause handing over 1200 quid every month to my dickhead landlord who probably owns the place outright and only uses my money to put diesel in his 100,000 quid jeep, was really getting me down and I was considering heading back to the folks.

Just one thing though, I was looking through the website concerned and just something that is open to question. It referenced something about management company fees, but I assume this would refer to the long term rather than for the initial 18 months. I’ve never had management company fees, do they apply to renters? I assume that won't kick in until I buy. Don’t want to look like a tit asking such an ridiculous question so if someone could read between the lines of the reference that is made on the legal page for me I’d appreciate it.

Link here

The_Conductor

Strictly speaking, while you are renting, its different from a regular rental, and its not only possible, but probable, that you will get a bill for the Management Fees. You are not being a tit by asking about it- it could potentially be as much as 2k (or more even), so it makes perfect sense to ask as many questions as possible in order to satisfy yourself that you are fully aware of what you are signing up to.

It is possible that the fees may be waived until such time as the builder has divested himself of the majority of the properties- but do not assume this- ask......

If you have any questions at all- ask. There is no such thing as a silly or stupid question- the only stupid question is the one not asked...... Its probably going to be one of the biggest financial decisions of your life- make sure you have all the facts that you need.......

Tomtom1

MsMolly wrote: »

been looking at this scheme recently. anyone know anything about them or taken one up. the one i'm looking at is , rent for 18 months, then they'll give you back all your rent to use as a deposit to buy the house. I sick paying dead money, might as well pay it toward something i could own, and i could never safe a deposit. its a vicious circle so i'm thinking this is a way out? i'm going to look into it anyway, have an appointment this aft, but was wondering if anyone had any more details.

Hi I,m looking for somthing exactly like this, However I,ve no idea who to trust or to believe as i,m a first time buyer and haven,t been through this process before . Where to buy , at how much, for how long etc, wait and hope for further price reductions or buy now. the rent to buy scheme as mentioned above would be perfect as it would give me greater freedom of choice and greater flexibility , can you confirm if you have taken this offer up and if so at what stage are you at. I,ve seen a programme on TV3 Ref Rent to buy , save a deposit etc. talking about houses down in Cavan this location didn,t suit me and it sounds like yours is a better offer for myself please let me know if and when you will take your next step as i am very interested to see if this offer is for real.

MsMolly

Tomtom1 wrote: »

Hi I,m looking for somthing exactly like this, However I,ve no idea who to trust or to believe as i,m a first time buyer and haven,t been through this process before . Where to buy , at how much, for how long etc, wait and hope for further price reductions or buy now. the rent to buy scheme as mentioned above would be perfect as it would give me greater freedom of choice and greater flexibility , can you confirm if you have taken this offer up and if so at what stage are you at. I,ve seen a programme on TV3 Ref Rent to buy , save a deposit etc. talking about houses down in Cavan this location didn,t suit me and it sounds like yours is a better offer for myself please let me know if and when you will take your next step as i am very interested to see if this offer is for real.

TomTom,
In answer to your question, yes i took up the offer, 3 bed house 215,000 furnished , 1000 per month . even if i choose not to buy i't's still cheaper than what i'm paying now and any improvements i choose to make won't be wasted if i buy in 18 months.
the one i've taken up is in Dundalk, but it's literally just off the M1 so depending on where you are its greatly accessible, 35 minutes from Dublin. 10 minutes from newry ( waheh cheap drink !!!!!) If you're dublin based you won't be lonely i'dimagine as it was all dubs viewing when i was up at the showhouse. i think it's the rent thing, the prices in dublin are so high for so little now, the prospect of renting something you can eventually own is worth a try. i've just been in a vicious circle renting for so long and when i finally thought i might try to buy, bang, the mortgages dry up and i'd never save a deposit. This is the only way i will.
i was meant to go for a visit to the house but had to postpone, am going monday instead. I saw the thing on the tv you refered to but the two deals mentioned had conditions and small print that the one i ended up with hadn't. you should check it out, pm me if you want , incidentally, they're offering a finders fee for people who sign up and get someone else to......so if anyone wants to make friends with me feel free !!!!!

Moonbeam

Sounds like you got yourself a good deal there:)

"35 minutes from Dublin" I presume you mean the county of Dublin and not the city.

It would be extremely optimistic if you were to make it to the city centre in under an hour.

MsMolly

never underestimate the power of a micra !

what i meant by that was it's just down the motorway in terms of where i work. as a blow in, it's all dublin to me !

Tomtom1

Tomtom1 wrote: »

Hi I,m looking for somthing exactly like this, However I,ve no idea who to trust or to believe as i,m a first time buyer and haven,t been through this process before . Where to buy , at how much, for how long etc, wait and hope for further price reductions or buy now. the rent to buy scheme as mentioned above would be perfect as it would give me greater freedom of choice and greater flexibility , can you confirm if you have taken this offer up and if so at what stage are you at. I,ve seen a programme on TV3 Ref Rent to buy , save a deposit etc. talking about houses down in Cavan this location didn,t suit me and it sounds like yours is a better offer for myself please let me know if and when you will take your next step as i am very interested to see if this offer is for real.

Hi tried to get to see these show houses this sunday but somthing came up , could you give me the web address as i am seriously interested in this location , and at the prices you have mentioned it really does sound too good to be true. Especially as they are new and you can choose kitchens etc, this is perfect for me as they would be 1 hour from both Dublin and Belfast , including Airports and shop,s .
Many thanks Tomtom1.

Victor

What is dead money? Is it dead money to be spending money on bank interest instead of rent?

MsMolly wrote: »

Anyway I’m going back Wednesday to get a site visit so I can see the actual house. I’m all delighted with myself now even though know I don’t own the property (yet) but it’s such a relief to me cause handing over 1200 quid every month to my dickhead landlord who probably owns the place outright and only uses my money to put diesel in his 100,000 quid jeep, was really getting me down and I was considering heading back to the folks.

Step back and stop letting your sense of begrudgery decide this for you.

Don't believe the sales bluff. Get independent advice, not that of a solicitor tied to the development.

MsMolly wrote: »

never underestimate the power of a micra !

35 minutes to Dublin suggests travelling the entire distance at 147km/h - does your Mirca have helicopter blades?

what i meant by that was it's just down the motorway in terms of where i work.

Then I suggest you don't work in Dublin.

as a blow in, it's all dublin to me !

Dublin blow-ins know better than to make fantastical claims like you have.

MsMolly

Tomtom1 wrote: »

Hi tried to get to see these show houses this sunday but somthing came up , could you give me the web address as i am seriously interested in this location , and at the prices you have mentioned it really does sound too good to be true. Especially as they are new and you can choose kitchens etc, this is perfect for me as they would be 1 hour from both Dublin and Belfast , including Airports and shop,s .
Many thanks Tomtom1.

www.saltown.ie

i went for an on site visit and chose the one i want. should be ready new year. next is to pick my kitchen and floors, though i'm not sure if i have huge say on that, also instead of appliances they are giving , a voucher for electrical shop, to get my own appliances, but i already have my own fridge etc so the rest is mine to spend on what i want i guess. if you do go to have a look will you let me know what you thought. thanks

Tomtom1

Hi thanks for the web address , Sounds like a good deal , and all the houses are new including appliances fixtures and fittings etc. If i can get away this weekend i,ll definatley visit the show home , are they open on sat and sun or sun only.
Thanks a lot , and i,ll be willing to split the finders fee if i buy a house there.

The_Conductor

If you are genuinely interested- the developer is very willing to negotiate on price if you are not availing of the finance schemes (rent-free etc) that they are offering. From what I've been told- you can expect up to 30% off list prices.

Also- while you may have a budget towards appliances- do yourself a favour and get the developer to install them for you- it'll save you major headaches......

Do not believe a word in the advertising bumpf about Newry being 10 minutes away, Dublin 35 mins, Belfast 30 mins- its simply not possible. Its more a case of Newry 20-25 mins (depending on road works and whether blasting is going on, at the A1), Belfast at very least an hour- depending on where you're going- allow an hour and half for the airport or in the evening, Dublin- 35 mins for the airport- at very least an hour and 15 mins for the city centre- once again depending on time of day and where you are going).

Also- check out the story with the Management Company and what the plans are for the developer to hand it over (after they have gotten rid of the 27 units that are still available obviously). Are you liable for management charges in the interim?

Also- its a good idea to totally disregard the information from the IHBA and Homefacts that the developer has on its posters onsite.......

Tomtom1

Hi Thanks for the heads up , some good points and i,d say it,s easy 1 hour from Belfast and Dublin city centers , but having had previous experiance of the M25 in and around London i can live with that no problem, I think i,ll go for a look at one of these and if all goes well will be in a new house by shortly after christmas.
Thanks for the tip,s .

Tomtom1

MsMolly wrote: »

www.saltown.ie

i went for an on site visit and chose the one i want. should be ready new year. next is to pick my kitchen and floors, though i'm not sure if i have huge say on that, also instead of appliances they are giving , a voucher for electrical shop, to get my own appliances, but i already have my own fridge etc so the rest is mine to spend on what i want i guess. if you do go to have a look will you let me know what you thought. thanks

Hi today,s the big day for me after having confirmed every thing you said by phone or visiting www.saltown.ie I,m at last going to see the show house i,ll let you know what i think after seeing it on the ground and speaking to a few locals to find out what ,s the crack from the people who live there .

Tomtom1

Tomtom1 wrote: »

Hi today,s the big day for me after having confirmed every thing you said by phone or visiting www.saltown.ie I,m at last going to see the show house i,ll let you know what i think after seeing it on the ground and speaking to a few locals to find out what ,s the crack from the people who live there .

Hi I saw the new houses over the week end i have to say i,m impressed i,ve left a deposit and my lawyer has confirmed all is as it should be and i,m covered against future price drops and I can rent for 18 months before i have to commit to either buying or walking away . But i doubt i,ll be in a position to walk away from Euro 20k. Also these houses are only 10mins on foot from the town center and less than 5 mins by car to the motorway , so fingers crossed i,ll be in by after christmas . all the best .

moonlightreader

From the Saltown website:

What happens after 18 months?
If you wish to take up the option to buy after 18 months, we will issue a standard Purchase Contract. If you sign this within 3 weeks of receipt, we will refund 100% of all rent that is paid up to contract completion to enable you fund your deposit. Any surplus over the deposit amount will be yours to do as you wish. There will be a sliding scale of refunds for contracts signed outside of this period. We will however work with you to ensure that you have your deposit saved if you genuinely want to purchase. If, for some reason, you no longer wish to purchase the house, you can sell the Option, thus protecting your “deposit”. This will have to be completed within a four week period after the 18 months.

What exactly does the company mean by - "sell the Option" ?

The_Conductor

moonlightreader wrote: »

From the Saltown website:

What happens after 18 months?
If you wish to take up the option to buy after 18 months, we will issue a standard Purchase Contract. If you sign this within 3 weeks of receipt, we will refund 100% of all rent that is paid up to contract completion to enable you fund your deposit. Any surplus over the deposit amount will be yours to do as you wish. There will be a sliding scale of refunds for contracts signed outside of this period. We will however work with you to ensure that you have your deposit saved if you genuinely want to purchase. If, for some reason, you no longer wish to purchase the house, you can sell the Option, thus protecting your “deposit”. This will have to be completed within a four week period after the 18 months.

What exactly does the company mean by - "sell the Option" ?

They mean offer the property to another party at the same price as it is being offered to you at (I would query the possible stamp duty implications, as obviously this would no longer be a 'new' property). Obviously if you can't find someone interested in buying at the price you are being offered the property- you are unable to exercise the option. In real terms it costs the builder nothing to have this option- as the likelyhood of being able to offload the property on someone else at that price in 18 months is slim. All the builder has to do is hold onto, or rent-out the unsold units- so as not to depreciate the perceived asking price, and presto- the price hasn't fallen....... Its actually really clever.

MsMolly

moonlightreader wrote: »

From the Saltown website:

What happens after 18 months?
If you wish to take up the option to buy after 18 months, we will issue a standard Purchase Contract. If you sign this within 3 weeks of receipt, we will refund 100% of all rent that is paid up to contract completion to enable you fund your deposit. Any surplus over the deposit amount will be yours to do as you wish. There will be a sliding scale of refunds for contracts signed outside of this period. We will however work with you to ensure that you have your deposit saved if you genuinely want to purchase. If, for some reason, you no longer wish to purchase the house, you can sell the Option, thus protecting your “deposit”. This will have to be completed within a four week period after the 18 months.

What exactly does the company mean by - "sell the Option" ?

if for instance me and the boyf decide living together is not all it;s cracked up to be, we can find an interested third party and let them take over. so say i've 6 grand paid i can be bought out and the third party can take over.

MsMolly

smccarrick wrote: »

They mean offer the property to another party at the same price as it is being offered to you at (I would query the possible stamp duty implications, as obviously this would no longer be a 'new' property). Obviously if you can't find someone interested in buying at the price you are being offered the property- you are unable to exercise the option. In real terms it costs the builder nothing to have this option- as the likelyhood of being able to offload the property on someone else at that price in 18 months is slim. All the builder has to do is hold onto, or rent-out the unsold units- so as not to depreciate the perceived asking price, and presto- the price hasn't fallen....... Its actually really clever.

re stamp duty, it is still a new prop as i am still renting at the point were i may sell on the option, at that stage i haven't bought the property.

The_Conductor

MsMolly wrote: »

if for instance me and the boyf decide living together is not all it;s cracked up to be, we can find an interested third party and let them take over. so say i've 6 grand paid i can be bought out and the third party can take over.

That is the theory behind it.
Providing the developer accepts that they have to hold onto any unsold property, or rent-it-out, as opposed to putting it on the market at below the price originally offered to you- they are sorted, home and dry. The fact that the property market may have fallen 20% in the intervening period is irrelevant- as the developer will have kept to the terms of the scheme, by not selling them at below what you paid.

To be honest- in the current market its a very attractive way for the developer to offload property- and in marketing speak it sounds really very very attractive. If you dig a little deeper under the surface though- all is not quite as it seems.......

The "protecting your deposit" only becomes a reality if you realistically think that someone is going to be willing to purchase the property from you in 18 months time, at todays prices. How likely is this to be?

The_Conductor

MsMolly wrote: »

re stamp duty, it is still a new prop as i am still renting at the point were i may sell on the option, at that stage i haven't bought the property.

Once a property has been resided in, irrespective of who the owner is (in this case the developer), it is no longer a new property. The Construction Industry Federation have made representations to the government to have this relaxed so they can rent out properties that are vacant, but unsaleable at current prices. There was to have been an article in the Finance Bill addressing this- its now thought that it'll be introduced at a later date.

It may be a new property for 'you', but its an 18 month/2 year old property for whoever is coming after you- with a degree of wear and tear on fixtures and fittings. For tax purposes its assumed that at the end of your tenancy, that 40% of the cost price of the furniture, fixtures and fittings, is written off.

Chris1980

Hi,
I was wondering if anyone else is having problems getting in contact with the saltown sales office.I picked my house and paid the deposit at the end of september 08.I was told that the house would be ready within 8 weeks.I have been trying to find out what the story is with the houses and am still trying 4 months later. If anyone knows anything could the please reply and put me out of my misery!!!!!!

MsMolly

I picked my house and paid the deposit at the end of september 08.I was told that the house would be ready within 8 weeks.I have been trying to find out what the story is with the houses and am still trying 4 months later. If anyone knows anything could the please reply and put me out of my misery!!!!!![/quote]


Hi, i too am taking up this offer, but i haven't paid deposit yet i've just paid the reservation fee ? i was told i didn't have to pay deposit til contracts signed? are you that far on ? i was down last week just for a nose, i was told they were contactig people to pick kitchens next week so depending where you are on the list you may have done so already. builders always say that it'll be ready such and such time but they never are, so i wouldn't panic that it wasn't going ahead, when i was down they were flat out. i'll p.m. you with the details i have for contact and see how you go.

Chris1980

Hi Msmolly,

Thank you for your reply.Im sorry i ment to say that ive paid the holding fee.Im just getting a bit frustrated at the moment,not been able to get a hold of anyone.I was the first to pick my house and as i said that was at the end of september!!I have not heard anything from them in regarding when the houses will be ready or when i get to pick the kitchen.Can you let me know if you have got any info for me.I have the furniture company on my back about delivering my couch sinse before xmas.Im just annoyed that nobody is returing my calls. I would just like them to give us a rough date (or month).:mad:

MsMolly

hi chris1980,

check out your pm. i sent you details this morn which will might help!
phew!!! i thought you 'd signed your contracts, was feeling left out !!

e08

hi has anybody heard of any of these rent to buy schemes in wicklow would br gratefulif you could let me know

mrgaa1

these schemes seem more popular now and I'm sure we'd have heard issues with them by now. It does sound to good to be true but from what I've read and saw it seems like a great option for those who do wish to buy. For those in the Cavan area the cavan echo seems to have info in it this week on these schemes. Will the rent-to-buy be the way forward for future housing projects even after this recession ? Test run the house first and then buy ?

jobless

these schemes are a last resort for the developer to shift his housing stock at todays prices... The prices for these house will be a lot less in 18 months time...
The 20 grand or so you paid in 18 months time wont look so so good when the properties are 40 k cheaper and your stuck with the price you agree today... the rent you pay is more or less going towards paying off SOME of the negative equity you'll be in

HollyCat

What happens in 18 months if you cant get a mortgage? If the rent paid equates to a 10% deposit you'll need a 90% mortgage which dispite banks advertising are rare as hens teeth.
If you contract to buy for €200,000 but in 18 months the bank value it at €160,000 (because prices continue to fall) they will then, assuming you can get a 90% mortgage, advance a maximum of €144,000. You'll need €46,000 to close the sale of which you've paid €20,000 (rent paid calculated for 10% deposit on €200,000) so you'll have a shortfall of €26,000 - What happens if you can't raise this €26,000? The answer given
What if I can’t get a mortgage in a 18 months time?
If you wish to extend the option for a further period, we will look at the situation then. We will take advice from financial advisers about your situation and work with you if you have a realistic chance of getting a mortgage in a reasonable time period.
This is a bit wishy washy - Does any one know if there is anything in the contract which gives a more definitive answer?

tesslab

Im getting more & more interested in these schemes. If you were to find the "perfect place" and intended on living there for the future would it be worth your while? No doubt these schemes will be cropping up all over the country in the coming months.
If at the end of the rental I had 25k savings myself to add on to the money received back from the scheme would it make much of a difference in getting a mortgage? As it stands without extra savings chances of getting a mortgage would be pretty difficult.
Any advice welcome.

The_Conductor

tesslab wrote: »

Im getting more & more interested in these schemes. If you were to find the "perfect place" and intended on living there for the future would it be worth your while? No doubt these schemes will be cropping up all over the country in the coming months.
If at the end of the rental I had 25k savings myself to add on to the money received back from the scheme would it make much of a difference in getting a mortgage? As it stands without extra savings chances of getting a mortgage would be pretty difficult.
Any advice welcome.

Unless you do find somewhere that you can see yourself happy to live in longterm (20+ years) steer clear. Most of the schemes this is in place are either at unrealistic prices, or will be wholly unsaleable and have little resale value in the future.

S.

MsMolly

jobless wrote: »

these schemes are a last resort for the developer to shift his housing stock at todays prices... The prices for these house will be a lot less in 18 months time...
The 20 grand or so you paid in 18 months time wont look so so good when the properties are 40 k cheaper and your stuck with the price you agree today... the rent you pay is more or less going towards paying off SOME of the negative equity you'll be in

every scheme is different and gives different incentives. the one i 've taken up has a builders guarantee and neg equity guarantee. i will only pay what the house is worth when i buy it in 18 months.

sambuka41

MsMolly wrote: »

every scheme is different and gives different incentives. the one i 've taken up has a builders guarantee and neg equity guarantee. i will only pay what the house is worth when i buy it in 18 months.

Where is it???

The_Conductor

MsMolly wrote: »

i will only pay what the house is worth when i buy it in 18 months.

That is the knux of the problem. Most of these schemes have a proviso that none of the units can be sold on the open market until such time as the developer has offloaded their units. Accordingly it is a reasonable expectation that an open-market-valuation will not have been established- meaning the 'value' of the property will be determined by the developer to be whatever the last price he sold a unit for was (irrespective of when this was).

Be very careful- and read everything they are saying backwards, often there is more in what is not actually said, than in the details they do give.

S.

ntlbell

MsMolly wrote: »

every scheme is different and gives different incentives. the one i 've taken up has a builders guarantee and neg equity guarantee. i will only pay what the house is worth when i buy it in 18 months.

who decides what the house is worth in 18 months time?

How will they do it?

domibox

Does anybody know anything about rent to buys schemes in Dublin?I am looking for the apartment- 2 bed in Dublin 18.