Originally Posted by lbc2019
Icare own the asset and get full market rent for 25 years! Win for them
If the tenant can't buy the house they get that too! $$
Icare paid for the house so of course they get it.
If the tenant can buy the house Icare effectively lose out on the inflation of the house price, so in some ways its a bit of a gamble.
Lets say house worth 300k and iCare pay that for the house, they then make 25 years of rent on it (the same as if they had bought another equivalent house for 300k). At the end of 25 years the tenant can buy the house for 300k, this is effectively a loss for iCare as compared to buying a house on open market the asset is worth far less. Or they continue to own the house and rent it out the same as if they bought another house.
So in effect they are taking a risk on the tenant buying the house back, whats the gain for them compared to buying a house on open market?
Guaranteed rent for 25 years maybe??
Thats my understanding of it anyway.