Renting to buy a fridge and television has been something most of us have come to expect as being normal in this day and age, but what about being able to rent to buy a home? The market is opening up for both buyer and sellers alike and what was once wishful thinking, is now becoming a normal part of everyday life, for people wanting to purchase their own rent to buy houses.
There looks to be a different trend on the rise for buying property in Australia. The thought is that you lease a property from the owner or developer for a period of time and then purchase, allowing you to test out the reality of your decision first.
The rent to buy idea is not new and is gaining ground, especially for first time purchasers in many places in Australia but now the idea seems to have extended to the purchase of overseas property, especially in the US and Canda.
As a purchaser the process is quite straightforward. You take out a rent to buy contract on a property. This contract is a combination of an option to buy and a rental agreement and can be for a period of between 3 and 24 months. It gives you the exclusive right to buy the property under the terms agreed, at any time during the duration of the contract at the original agreed price. At the same time you get a tenancy in the property, at a previously agreed rental, for the duration of the contract. If you do decide to go ahead with the purchase the combined costs of the option and the rental paid are taken off the purchase price.
For example you could buy a 2 bedroom flat on the Gold Coast of Queensland with a purchase price of $295,000. The purchaser could take a 36 month rent to buy contract on this flat would at a cost of $10,000.
On newly developed properties some developers allow a buyer to sublet the property for the length of the contract, so if your purchase is for investment purposes or perhaps a holiday home that you wish to rent out for the rest of the year you can start doing so even before you have bought the property.
So, if you are buying or selling it could be to your advantage to check out rent to buy and see if it can help you achieve your goals.
