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I want advice in something that my father is talking about.
We have a property thats under a rental case for 7 years. The tenant did not pay the rent and the lawsuit went for 7 years and we did not get the rent for 7 years. Now finally the case is over and we are planning to rent it out again.
When we rent out to a new company (its a commercial building) we will get quite some amount as safety deposit in advance. My fathers plan is to use the safety deposit, add the savings which he made and also take a bank loan together to buy a house. He want to move into that house.
So we will pay the EMI for bank loan (Its going to be a lot of amount for 5-10 years) using the rent from our existing house and commercial plot. This should run for 5 years.
Thats his plan.
I think this is too risky because I do not like the idea of using someones safety deposit to buy a property because he might ask to return in back at any point of time and we will have to give it back. For that we will have to sell the house which might not be an easy task (Due to relocation, time to sell .etc). And the bank loan will be hard to pay unless the rents are paid by the tenants properly. Due to my experience with a property on hold due to a rental case I am seriously scared that this can happen again, in which case the bank loan EMI will be at a standstill.
My fathers plan looks stable if everything goes well. If it does not go well I feel that it can lead to big problems.
What do you guys think?
Now, I wont be even asking this question if my financial situation is stable. Its not, I am trying to make it as an entrepreneur. I am in the struggle face now and i cannot take some EMI in my shoulders at the moment.
Regards
Adam
We have a property thats under a rental case for 7 years. The tenant did not pay the rent and the lawsuit went for 7 years and we did not get the rent for 7 years. Now finally the case is over and we are planning to rent it out again.
When we rent out to a new company (its a commercial building) we will get quite some amount as safety deposit in advance. My fathers plan is to use the safety deposit, add the savings which he made and also take a bank loan together to buy a house. He want to move into that house.
So we will pay the EMI for bank loan (Its going to be a lot of amount for 5-10 years) using the rent from our existing house and commercial plot. This should run for 5 years.
Thats his plan.
I think this is too risky because I do not like the idea of using someones safety deposit to buy a property because he might ask to return in back at any point of time and we will have to give it back. For that we will have to sell the house which might not be an easy task (Due to relocation, time to sell .etc). And the bank loan will be hard to pay unless the rents are paid by the tenants properly. Due to my experience with a property on hold due to a rental case I am seriously scared that this can happen again, in which case the bank loan EMI will be at a standstill.
My fathers plan looks stable if everything goes well. If it does not go well I feel that it can lead to big problems.
What do you guys think?
Now, I wont be even asking this question if my financial situation is stable. Its not, I am trying to make it as an entrepreneur. I am in the struggle face now and i cannot take some EMI in my shoulders at the moment.
Regards
Adam
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