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own2rent
mortgage that acts like rent with tax advantage of ownership | |
create a loan with no money down and a guaranteed buy back. the loan would have a 1000 year duration so almost the entire mortgage payment is interest (deductable).
"property owner" gets rent like income from the property as well as any appreciation in its value.
"renter" gets rental rates
and convenience with the tax advantage of being a property owner.
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Is this a form of fraud? =^) |
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Suspect, suspect. A few thoughts:
It sound like the property owner is also the lender here, this is commonly called a leaseback arraingment. The renter, also in this case the lessee, pays premiums to the property owner for the lease. Typically, what the property is mortgaged for in installments plus 10-12% APY.
An excellent choice for the secondary residence that may be exempt from favorable tax treatment and part of a portfolio. There may be a problem with the loan term since the tax treatment will likely be found in accord with depreciation time, and after the first 10 years or so of the loan it would clearly be that mortage interest will far outstrip ROI potential for the property. |
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