Want to Sell and Rent Back Your Home? Why It's Not a Good Idea

Recently, the law in Malaysia was changed to make sure that all sell and rent back companies are regulated by the Financial Services Authority (FSA). This is because many sell and rent back companies were taking advantage of people who were in obvious financial difficulty. They may promote and advertise themselves as your best friend when your home is under threat of repossession, but all they want in essence, is to buy your home at a knock down price and then continue to make money out of you by charging you rent.

The kinds of nightmares that people have experienced include:  being charged very high rents - so high that they are often more than the mortgage repayments you couldn't afford previously. Many can't afford these high rents and have to move out either voluntarily or by being evicted.  These companies not being able to pay their mortgage on your home and consequently the house being repossessed by their mortgage lender, in which case clients have had to move out and find somewhere else to live. Sell and rent back companies offering short term rental contracts which means that after 6 months they can throw you out if they want to.

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The law making sure that these companies are regulated is a welcome move, but the companies offering to buy your home to sell and rent back is still just out to make money from your misfortune. They are not there to help although they will say over and over again that they are. The law still states that if the owner of your house wants to complete major repairs to your home they can evict you and if the company can't pay their mortgage you will still be evicted. The main area where the law has changed to protect the consumer of these services, is by making the companies offer long term assured tenancy agreements. This may offer a little more protection, but sell and rent back companies still have the right to increase your rent to a level you might not be able to afford.

If you at threat of repossession on your home it's a very worrying time, but there are other options than sell and rent back. There are options that will enable you to keep your home or if you do need a quick sale, several ways of doing this. Sell and rent back is certainly not the only solution.