Rent To Own - How Does it Work?
This process is for persons serious about home ownership & needs help that traditional financial institutions’ won’t supply. It is not a stop gap measure to counter the present rental shortages but a longer term solution to security of tenure & financial prosperity.
For short term rental you are better off sticking with the existing rental market even though it may be fraught with uncertainties. You are no doubt aware of present shortages.
If you do wish to Own then the vendor provides property for Rent/Purchase at a fixed price. You select a home of suitable size, pricing & local that suits your needs. You sign a lease with an opportunity to purchase agreement with vendor. Rents will generally be higher as they more closely reflect a mortgage payment amount. They are currently running at about $185/week rent payment per $100k of property value. I.e. payments for a;
$200K house …………………………………..$370/week
$300K house …………………………………..$555/week
$400k house …………………………………. $730/week
$500k house …………………………………. $950/week
Leases are signed for a period of up to 3 years. If you choose at any time in that 3 years to take up the opportunity to Purchase 30% of rental will be credited to your house deposit.
If you have a suitable size deposit you can move straight into purchase mode, payments very similar to rental amounts.
Main thing to remember is that if you do purchase at some time then all of this money that you have paid goes straight into your back pocket in the form of equity & is not lost forever in some other landlord’s pocket.
Recently with rental property shortages we are having to purchase property specifically for applicants to cater for the demand & so do require an application fee.[Request info on the types of active searches available] The person’s moves straight into ownership phase with Ezy-finance at approx. [$185/wk / $100k property value] With interest rate increases
To speed up the process register your interest at http://www.hot-properties.com.au/ under section of “wanting to buy”.
You can search for any suitable properties on this site listed as a "no-traditional sale”. For info on vendor finance click here.
If you have no deposit and would like to profit from renovating your home click here for sweat equity loan info.
Foot Note Update
With the increasing deterioration of the financial sector in Australia the buying and selling of real estate is becoming increasingly stressed. Use this information to your advantage...don't be a victim of it...find the unheard of deals...you may have to look though as the present Government is doing everthing to try and cover up forced sell ups.
I recently saw a brand new 40 square home on 25acres down Marulan way offered as a RTO for under $600/wk with present time valuation being $600k !!! This was not even a mortgagee forced sale!
Content
How do I Qualify for an Easy Rent to Own Home?
First of all you will need to find a reputable business that provides this type of opportunity. perhaps the biggest and best operator in Australia is Easyhouses.You need to demonstrate to them that you are capable of the house purchase. They will verify your employment, payment & credit history. They are not looking for perfection, they will be just trying to weed out the habitual losers. Generally they will require an opportunity fee up front comparable to what you would pay for 2 – 3 months rent which will be credited to your deposit.
How long does it take to qualify?
We will provide you with a basic application. Once this has been completed it usually takes us a couple of days for us to do our home work.
How long does it take me to get into my new house?
After you have qualified, Easy houses will present properties to you that maybe of interest to you or purchases one on the open market to suit your needs. Once you have indicated to us that you would like to purchase a particular property we will do a final numbers check. Once Lease is signed you can move in immediately.
Can I do improvements to my house?
Yes you are most welcome to carry out minor works at your discretion. Works of a more substantial nature we request you ask permission….but generally we encourage such work if carried out in a professional manner as this improves your property value. Easy houses appreciate house proud owners.
If the house I choose needs fixing does the vendor fix it.?
The Vendor should a property inspection prior to hand over & will ensure basic services are operational before you move in. Other items needing attention are left with the new purchasers to deal with as they see fit. [Property price, will reflect it’s condition] You may be able to negotiate with the vendor for some “sweat rent” compensation. Some purchasers prefer “renovation specials” as they are more affordable to move into & you get the colour scheme & carpet of choice.
When Am I able to purchase my house?
Anytime you have satisfied yourself that this would be a wise direction to move in to start taking advantage of the benefits of home ownership. For some couples this could be 1 day if
For example they want to take advantage of FHOG.
I feel as though it might be a bit of a financial struggle?
Yeah you are probably right..join the club! Life seems to have a habit of serving up a few balls out of the left field. However if you live your life out of fear of the unknown you will never move forward. There is ways of managing this situation of getting yourself into your own home. Personally you can take massive action in every day life to increase income. You can get others to share in payments [partners, friends, family] & you can also share in house purchase title by bringing in co- purchasers from anywhere from 1 to 50%. The vendor may even take up to 20% equity. If you decide to go ahead with purchase you with need appropriate funding.
What happens if I default?
The Agreement will be terminated; your payments to date will be treated as rent & are non-refundable.
Am I up for any other Costs?
Your legal's if you so desire. Normal home ownership costs such as rates, utilities, insurance etc. apply when you purchase, which makes your payments a little less as these figures have been factored into the rental payments.
To search for properties go to hot-properties , to apply for a RTO Home go to Easy Houses, to see Reality videos go to RTO Videos
