Rent To Buy

What we are about to descibe for you is more information on Rent To Buy. There are many ways to make a rent to buy property purchase work, and its important for you to identify what rent to buy deal will work best for you.

There are normally a few different categories that rent to buy home buyers fit into. Some have no deposit with great credit ratings. Others have no deposit with bad credit ratings. Some people have owned a home before. Others have not owned a home before and will normally be entitled to stamp duty relief and more often then not, the first home owners grant.

Rent to buy home sales will normally work in four ways.





1. Contract for sale between two parties with a terms contract calculating your loan repayments to the owner who is selling the property. These deals are normally in place for 1 to 3 years, but many have been known to run longer then this.

2. Rental agreement with Option to Purchase Deed. The rental agreement is your standard rental agreement that you probably already have in place. The Option to Purchase Deed is an agreement made between you or the owner, where you set a price on the property that you are both happy with (sadly and quite often it is only a price the owner is happy with), so that you can show regular payments over time, and hopefully gain some capital growth at the end of the agreement, should you wish to purchase.

3. Borrow 80% from the bank on low doc terms, and look to borrow the deposit directly from the vendor who is selling the house. This is made possible when the vendor has plenty of equity available (at least 20% equity).

4. Rent with Equity, combining your normal rental agreement and a contract for sale, where you purchase tenant in common shares in the property you are renting. This means you could purchase 10% of the current market value of the home, and have your name listed as a 10% owner on the title of the land. The original owner will be noted as owning 90%. You normally continue to rent the home, and purchase your shares in the property over time, as you can afford to over time.

Rent to buy property purchase can be a dream come true for new home buyers who don't quite fit the criteria of the banks. Before choosing a rent to buy home, it is important to make sure you trust the person you are buying from. We prefer that you build up the skills to do it yourself, because most investors will charge a premium of between $20,000 to $100,000 profit when you purchase from them. This is only okay if they purchased the home at a good discount. Often, this does not happen and the buyer becomes disadvantaged.

Don't let this happen to you. Become educated today.

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