A growing number of real estate experts are advising homebuyers to consider flexible floor plans when choosing to buy a house. A flexible floor plan divides part of your home so that it can be used either for rent or for other business purposes. In that way, homebuyers can have options in creating passive income and ease the burden of getting a new mortgage.
In addition, these experts are also saying that homes with rental accommodations or a separate home office have the potential to appeal to a broader range of buyers. So from a resale perspective, there are advantages of having a flexible floor plan.
Based on this trend, it’s clear that more and more people are looking for other ways to make home buying more affordable. Moreover, this trend shows that a lot of people want to earn passive income and improve their liquidity.
However, there are limitations to this strategy. For one, not all houses have a flexible floor plan, making options more limited for a homebuyer when selecting houses. Secondly, having tenants essentially living in the same house (with only a wall separating them) may reduce privacy, and not everyone is comfortable with that.
From the point of view of sellers who own an ordinary house, will they need to renovate their homes to incorporate a flexible floor plan just to attract more prospects for their house?
Flexibility in the Terms: A More Practical Approach
The truth is that you don’t need to have a special kind of house to make home buying affordable. And certainly, you don’t need to make drastic changes to your current house or investment properties in order to profit from them. You can achieve all these goals through flexible seller finance terms.
If we look at the reasons as to why home buying is ‘unaffordable’, it’s that people have a hard time saving for a deposit. Also, with interest rates expected to go back up, getting a new bank loan will become even more difficult – especially for younger people who are still starting out in their careers and who are without an extensive credit history.
Simply put, the common ways of buying houses require a huge investment sum upfront, and not everyone has enough cash on hand to meet these requirements.
If buyers can’t buy, sellers are unable to sell. And everyone loses out.
However, what if these roadblocks to buying property
are removed? What if buyers don’t have to spend a large deposit upfront? What if they don’t need to take out a new bank loan?
This is where seller finance comes in. In the traditional process, sellers ask for all their money now. The problem is that not everyone has 300,000 – 600,000 dollars to spend.
So to make things easier on everyone, buyers and sellers can agree to more flexible payment terms. For instance, rather than take out a new bank loan, a buyer can simply take over the existing loan and then pay the remaining equity gradually.
In that way, a seller can immediately move away from unwanted debt, while incremental payment from the buyer generates a continuous flow of income. Moreover, because payment has become much more convenient for the buyer, it allows the buyer to meet the seller’s asking price.
From the point of view of the buyer, flexible terms remove the need to spend a huge amount upfront and it allows the buyer to move in the property quickly. So it benefits all parties.
The beauty of it all is that flexible payment terms can be applied anywhere. You don’t have to look for a specific house or do added renovations to fit the criteria.
Now, imagine if you look at this approach from the point of view of an investor. How much more efficiently will you be able to grow your portfolio if you don’t need to get new bank loans to acquire investment properties? And how many of your investment properties can you generate positive cash flow from, by applying flexible payment terms?
If you’re interested in finding out more about how to gain the winning edge in a competitive market, click here
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Australian property investment specialist and best-selling author, Rick Otton, has been investing and teaching his innovative real estate strategies for 23 years. As the founder and director of We Buy Houses Pty Ltd, his goal is to empower people with knowledge through his cutting edge investment strategies
If you’re interested in buying or selling a house through seller finance strategies, you can click here
for a free information pack on my creative strategies.
Australian property investment specialist and best selling author, Rick Otton, has been investing and teaching his innovative real estate strategies for 23 years. As the founder and Director of We Buy Houses Pty Ltd, his goal is to empower people with knowledge through his cutting edge investment strategies.
Disclaimer: while due care is taken, the viewpoints expressed by contributors and/or sponsors do not necessarily reflect the opinions of Your Investment Property.
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