Wrapping a property is a simple concept that can create passive income for you and will give the purchaser a chance to buy a property which would have otherwise been out of reach at that time. However, there are a few things you must know before you jump in and trip up on some of the technicalities.
So what exactly is a wrap?…A wrap is when you then vendor of a property becomes more like a financier and less of a traditional landlord. The party interested in purchasing the property becomes responsible for everything the landlord normally takes care of, such as rates, maintenance, etc.
Wraps are generally suited to people who cannot get financing from the bank at that exact point in time, but will be able to acquire a loan in the near future. It is here that you become the bank. You offer them the property as if they were renting, however they rent money they pay you comes off their agreed purchase price. After a year or so when they qualify for a bank loan, they simply pay off the amount owing to you. This ensures that they will take good care of the property and at the same time, you have been getting passive income because the rent they were paying was more than that which you had to pay off your loan from the bank.
Property wrapping creates a win - win situation for both parties involved, so it is a good choice if ever the situation arrises where the buyer cannot get finance immediately. You walk away with a sum of money greater than what you put in, and they walk away with a property which they wouldn’t have otherwise been able to afford.
For further information on this investing technique and many others, please visit me on www.propertyprecision.com/wraps.htm
Tags: flips, investing, investment, lease options, property, real estate, wrapping, wraps
1. What is an Energy Star
Tags: conservation, energy star, investment, new homes, property, real estateBefore you buy any property in Cyprus you should always seek the advice of an expert real estate agent and lawyer. In this regard, the following is a quick checklist of some of the basic things they should be checking:
1. Doing a land title search at the relevant District Land Office - this is done to make sure that the seller has a valid land title deed, which should also tell you whether there are any mortgages or other claims over the property;
2. If the property you are buying is still under construction, which many are, then your lawyer should be checking to see whether the project has the proper planning and building permits. Also, make sure the land title deed for the project has been split into individual deeds and not one deed for the whole project;
3. If you buy land to develop yourself, make sure your real estate agent checks that the land can be developed: for example, that it has easy access to a road; telephone, electricity and water facilities, etc.
4. If you are buying leasehold property, where the lease term will exceed 33 years, you’ll need to make an application to the Council of Ministers in much the same way as if you were buying freehold property - so make sure your lawyer does this;
5. Insofar as the contract is concerned, make sure that the contract contains provisions that:
a. the sale/purchase is subject to you obtaining all the required permissions;
b. possession is taken upon execution of the contract, or completion of the project, whichever is the earlier;
c. for the purchase of a flat, general use and maintenance rules are included in the contract;
d. the contract contains an unwind/refund provision, in case you need to get out of the contract before you take possession of the property;
e. where the property being purchased is a new development, the contract contain a warranty period for the construction;
f. where the seller is a company, that the person signing the contract is authorized to do so; and
g. whether the seller is a person or company, the contract has been witnessed by at least two witnesses of legal age.
Mark Vurnum provides useful information about buying property in Cyprus. Visit http://www.yourcyprusproperty.co.uk for more FREE information
Tags: cyprus, investment, property