Rent to Own

With today’s inflated real estate prices, many hopeful home owners are stuck renting as they experience difficulties securing home finance as they don’t pass the bank’s strict lending criteria and others, simply can not afford a large cash deposit.

Rent-to-own is a long-established technique for helping people purchase property and is becoming increasingly popular as house prices spiral upwards. Put simply, rent-to-own allows you to rent your home whilst you are also paying it off.

There are major benefits to house purchasers using a rent-to-own system:

• Any accrued equity in the house price belongs to the purchaser, which isn’t the case for people who rent as it is the landlord who benefits from increasing house prices.
• Rent to own plans are normally established with small deposits and some do not even require a deposit.
• Rent to own purchasers are able to decorate the house without the previous consent of the landlord.

Self-employed individuals, new citizens to Australia, those who do not have a valid savings record and those with past credit issues are able to become home owners through rent-to-own plans.

An example of rent-to-own follows; a purchaser rents a house at $250 per week for four years and simultaneously pays a small weekly amount to the owner towards the house purchase deposit. After four years the agreed price of the house is acquired through external finance and the house ownership is transferred. The amount still outstanding to the seller is the agreed price of the property less deductions made for agreed applied rent credits