Ideas on alternatives to Riba/Interest in Housing mortgages

Here are some ideas on alternatives to getting into Riba/Interest in home mortgage. These may not be practical in every case, but never the less offers some alternative to think about.

1. Renting: - in some countries the government may assist you in renting i.e. rent assistance or provide you with the initial bond or deposit.

2. Government housing: - this is a government scheme to help those wanting to live in a certain area but are unable to buy in that area or pay the high rents that area demands. The government provides and or offers the boarder/occupier a long lease, general more than 5 years. The benefits are the long lease and the reduced rent offered. In some cases the government also helps in reducing the rent and waving water expenses.
Some disadvantages of this is the occupier may not get the house or unit he/she likes, and the waiting list to get into such a scheme may take as much as 11 years.

3. Moving to a cheaper area: - moving to an area that has cheaper house prices and or cheaper rent.

4. Down sizing: - moving from higher rent to lower rent or moving from a big place which may be a bit dear to a smaller place which is cheaper or selling a big place and then buying a smaller place in the same area or selling a big place and buying a big new/old place in a cheaper area.

5. Area Down Sizing: - here you may own a small place in an expensive area by selling you will have enough money to buy a bigger place in a cheaper area. You could even have enough money to build the type of house you may need.

6. Main Road Living: - quite often these properties are cheaper to buy or rent. This has some advantages; if you are starting a business you can advertise i.e. you can put a sign out the front of the house, which may help you gain more customers. Doctors, accountants and car sales people usually operate in these spots. The disadvantage is of course the noise and pollution, but there are ways you can reduce these.

7. Country Living: - country or outback living is usually cheaper.

8. Moving to another state: - moving to a cheaper city or state in the same country you are already resident of. Rent before you buy for at least 6 months, see if there are any opportunities.

9. Living Overseas: - moving to another country to live, it may be cheaper to live there. For example an apartment in a country such as Australia will cost you around $200,000+(plus). Where an apartment in a country like Lebanon will set you back $40,000+(plus) and the apartments in Lebanon are usually much bigger than those in Australia.

10. Dual Country Living: - make your income in a country for 1 year or so and then travel to another country for a year or two and live there cheaply. In some cases people work one year in one country and then are able to live a lifetime with the money they make in another country.
You may be able to do this in your own country i.e. work in the city for a year and then spend the next two years living in the countryside, visa versa.

11. Rental Upsizing: - for those who already own part of their property, want to live in the same area but need a lot longer to pay off their current mortgage can sell their property, buy outright (an investment property) in a cheaper area, then rent out the new (investment) property to someone. The rent money gathered from the investment property can be used by the owners to rent in the same or a better area than the one they are living in now. Usually there is a short fall but all more accepting to the creator and more rewarding for you i.e. the investment property may make you $200 a week, but you rent for $300 a week you make up the difference.
Note you can invest in other types of property not just houses or units here. You can invest in retail or industrial or other, which will earn you higher rent i.e. a cheap factory in a poor area can earn more rent for you than buying for the same price a house.

12. Overseas Upsizing: - same as rental Upsizing above only the investment is bought overseas.

13. Dual Occupancy: - a term used in real estate where the owner of a house demolishes the existing house on his/her property then building two new properties adjoining each other on the same block. The owner can then either sell both the new properties and or sell one and then live in the other one. The mortgage can be reduced to near nothing for the owner of the property when this type of venture is taken out. The profit from selling of the one property will go into paying off the second property.

14. Subdivision: - someone with a mortgage on a big size land/block can subdivide that land/block into more than one block. Therefore he/she is able to sell the blocks individually.

15. Reducing your bills: -disconnecting your phone, refraining from smoking, using public transport, sharing your car, etc, etc will help you rent in an area you like.

16. Caring for someone: - some governments pay you money to care for somebody, even if that person is from the same family. This can help you gain better rental property.

17. Living with the in-laws: - this will help you save up enough money for future accommodation. Or you could build a granny flat at the back of the in-law existing residence. (visa versa)

18. Company Free Interest Loans: - ask your boss, or company you are working for to help provide you with an interest-free loan. You may wish prior to taking on employment with a company to include in the contract an interest-free loan, free rental or rental assistance, free accommodation. Remember if they need you there is a likely chance they will agree to help you, especially bigger companies. They may provide you with a free car, why not free accommodation or interest free loan.
 
19. Consultants/Specialists: - if you are a consultant you could include accommodation arrangements as part of your contract. Negotiating an establishment fee prior to beginning your work with a company can be used for renting. Other arrangement can also be included in the contract like an interest-free loan etc, etc.
So learning to be a consultant and or working in a salary arrangement paid position may help you in your in devour to find suitable accommodation, inshallah.

20. Working in the defence force: - the advantages here are numerous to say the least. Free accommodation is usually in the contract especially as you go higher in ranking.

21. Other jobs: - working as a nanny, butler, farmers assistant, on a cruise ship, holiday resort, miner, in some cases nursing, maintenance office in a multi-story building etc, etc. Will generally get you free accommodation.

22. Overseas worker: - taking up employment overseas especially after being head hunted can get you free accommodation. Remember to include it in your contract.

23. Kit homes: - kit homes are cheap to buy; you can rent a block of land on the cheap, then place your mobile kit on it.

24. Kit home II: - you can buy a block of land, build a kit home on it, this may accommodate you for up to15 years, demolish it then resell the land 15 years later at a higher price.

25. House Swapping: - if you own a big home and you are no longer using all the rooms, but you want to keep your home as an investment. You can negotiate to switch/swap your home with someone else that may have a small home but is in desperate need of a larger one, for a period of time.

26. Retail Living: - In most countries retail premises are built with residential attachments or adjoining living quarters/space. In most countries the retail premises (can be separated from the living areas) is separate from the living areas. The living area (accommodation) is usually found above the retail premises (or above the shop) and in most cases having more than two bedrooms. Such accommodation is usually cheaper than conventional accommodation. In most cases you can negotiate with the landlord the security aspect in relation to living in such a premises. You provide security the landlord provides you cheap or free accommodation. The landlord may even offer you work.

27. Residential Aspect/Retail: - Buying a retail premises (shop) that has no potential but residential, usually upstairs accommodation (at the time it may be cheaper to buy than a normal residential property). This can make you big money especially in the future as land value continues to rise. Forget about the façade or exterior look of the premises and that it may be run down. The land can later (in the future) be used to build high-rise apartments or even multi-storey shopping centers.

28. Pooling: - this usually works well when two or more people have each on their own saved up at least three quarters or two thirds for that matter of the money needed to buy a property. The last quarter or last third is lent out to one of the parties depending on who is picked first (usually the one in most need) by the other two. The two lenders can then demand rent from the borrower earning them some money while the borrower pays them back. Keeping in mind that all parties are investors in the same property and are registered in the title showing their share.

29. Investor Shares and Sells: - an investment property is not classified as an investment if the property remains untenanted. To save on tax most investors leave their investment property without a tenant especially in the last year before selling the property. Why leave the property untenanted when you could have someone look after it for you for free?. It is a known fact the properties sell for much higher prices when buyers find the property is occupied and people are happy to live in it. So why not help a family member or friend live in it for a period of time. They can also help you maintain the place. But you must be careful here, the person you lend the place to must not have interest in buying the place, they may make it hard for you to sell the property when potential buyers come through during inspections. But the family member may want to buy it from you and this may be good for you. All agent fees are waved and you might even get the price you want. It is best to get the property valued first then negotiate on the price. Most property appraisals/valuations are free. Get a couple of valuations.

30. Day & Night Sharing: - Some people work at night and others work during the day, if you happen to be renting but only use the property for half the day, you can share that property with someone who is working a different shift to you. Halving your rent.

31. House boats/caravans: - for those retired and like vacations this is the way to go. You can buy them or rent them. Docking a boat may cost less than renting a house or unit. You got the views also. You can negotiate security arrangements with an owner of an expensive boat. For the security you provide you may get free accommodation. The boat owner gets peace of mind and cheaper insurance.

32. Holiday homes: - Holiday homes are usually used only during the holiday seasons. Unlike some western countries in most Middle Eastern countries the holiday homes are used only during the summer breaks. Middle Eastern people like to stay away from the coastline during winter. This creates an oversupply of units in cities near the coastline, as people move inland to work. This is a great for those who like to rent on the cheap. Property is cheaper to buy during the winter season and the airline tickets are generally cheaper buy.

33. Islamic bank: - find an Islamic or a non-Islamic institution that can offer you an interest-free loan. Brothers and sisters until bait el mal (house of charity) is established where those people who own property for more than 3 years and have done nothing with it, are ordered to surrender it is established, to give it to somebody that will do something with it (i.e. live in it, or use it to generate wealth), we will have to continue to look for other methods of accommodation living.