SAVE FOR YOUR HOUSE WHILE YOU MAKE IT A HOME
Rent-to-Own has steadily become a popular option when buying real estate because you rent at the same time put away toward your down payment
NO-MORE-RENT
Program
RENT-TO-OWN EXPLAINED
This is a great option to get into real estate for families who are not able to get a mortgage right away to buy a property. The Rent-To-Own strategy (also known as Lease Option or Lease to Own) is where you buy a house directly from the owner. The great thing about buying it directly from the owner is you can negotiate the terms, set the purchase price, potentially save money on the closing cost and make money if the property appreciated more than the purchase price.
Usually, the way it works is
- Join the NO-MORE-RENT program
- we agree on a term (ie 2 yrs or 3 yrs) and a future price for the property
- you make a non-refundable payment (ie 5% minimum)
- you find the property and move in
- you pay rent plus utilities
- you pay an extra amount (top-up) that is returned to you at the end of the term
- you live there and pay for any up-keep
- Fix your Credit Score
- work with our financial team to learn how to budget, and save
- at the end of the term (ie 2 yrs or 3 yrs), you get a mortgage from a bank
- Get a mortgage
- Owner transfers the title to you
These are very simplistic steps to rent-to-own.
You should treat this as a purchase, not as a rental. Meaning, you should get a home inspection and appraisal done. One the terms are agreed upon, they should be documented in a contract and you should review it with your own lawyer.
Some of the risks to you, as the renter should consider are:
- By the time the term approaches, the set purchase price may be lower than the value of the property. This is great news for you. You would get the mortgage and the title transfer. Deal done.
However, if the set purchase price is higher than the value of the property, then this isn’t ideal. You are in effect paying more for a property and might not get a mortgage from the bank. There will be a clause in your contract to allow you to cancel the deal. However, if you walk away from the deal, you will forfeit your option and any top-up amounts you paid during the term that you ‘rented’ (ie 2yrs or 3 yrs). Not to mention, any money that you spent on up-keep to the property.
- By the time the term approaches, you must be able to obtain a mortgage to pay the set price less the down payment and top-ups. If for some reason you can’t get a mortgage, then you can renegotiate the terms with the owner. However if they are not open to it, then you will forfeit your option and any top-up amounts you paid during the term that you ‘rented’ (ie 2yrs or 3 yrs). Not to mention, any money that you spent on up-keep to the property.
There are some risks to the owner too, including losing appreciation value. The owner has no idea of the worth of the house so they might be taking a potential loss as the purchase price is set and agreeing to several years prior. Keep this in mind during the negotiations, as you want this to be win-win situation for the both of you.
The great thing about rent-to-own, is it can truly be a win-win situation for the both of you. Your family gets a home and the Owner has a stress-free real estate property. Submit an application to see if the Rent-to-Own is right for you.
Ready to move into your own home? Fill out the on-line form to see if the NO-MORE-RENT program is right for you.
The information presented is from sources believed reliable, however, no responsibility is assumed for the accuracy of this information. The opinions or advice contained should be verified with a third party. The originator of this content disclaims all responsibility and liability for the accuracy and content of the attachment and for any damages or losses arising from any inaccuracies, errors, viruses, e.g., worms, trojan horses, etc., or other items of a destructive nature, which may be contained any of the attchments and shall not be liable for direct, indirect, consequential or special damages in connection with the content .
Hi. My name is Huong. When you join the No-More-Rent Program, I will be the main person you talk to. Click on this link to find out why I started the No-More-Rent Program and to get more information about me.
I know this can be a tough time (and maybe even scary) for you and your family. Lets have a conversation to see if we can help.
If you have any questions, don't hesitate to email us at info@cashproperty.ca.
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