Rent to own is a deep-rooted technique to assist people in purchasing house. It has become very trendy. It is also becoming well accepted since the prices of houses touch the skies. It is fashionable. One can clear all his loans, while he rents his property. One classic example can be that a purchaser pays a meagre amount as a weekly deposit to the owner while he rents the property for two hundred and fifty dollars per week for four years. After 4 years, the title gets transferred after the contract price on arrangement of home finance. The balance amount to the seller is the price of the property less deductions made for amount accepted for credits.
Future prospects:
This plan comes handy for the self-employed and fresh immigrant to Australia who neither has past savings record or good repayment track record, but grows to become home owners. This system benefits the house purchasers as follows:
- Accrued equity in the price of the house belongs to the purchaser in this system while in the case of people who rent; the landlord enjoys maximum benefits from increasing house prices.
- This system is formulated with small advance and in some special cases; there is no need for deposit.
- It enables the purchasers to decorate their houses without the acceptance of the landlord.
In Australia, it is a familiar subject, and we have had lot of people who would like to prefer rent to own to finance to purchase their own house. This is the best alternative which may be also termed as lease-to-own a property. Normally, within 3 years, one can purchase his own property. A portion of the rent that they pay every month goes towards the down payment which is converted to initial payment to buy an own house.
Merits and Demerits:
It has its own merits and demerits for either party. Landlords who had purchased a new property will have a sigh of relief from shelling out two mortgage dues at once. Many homes have come for sale thus making the housing market slow down the pace. Hence, for sellers, this might be the best choice. At the same time, the buyers who cannot yet find the money for a house might be able to achieve one faster. Australian tenants are faced with rental catastrophe. Families are finding it very difficult to save amount to buy their own property due to rise in rent prices. Indeed, the problem is enormous. Nearly one-third of a person’s income is spent on rent alone. Hence, few young families never see their dream of owning their home come true.
This system has some advantages of owning over renting:
• They need not answer a landlord just to keep a pet at home.
• Home ownership gives something in return for the money one spends
• As the years fly away, the rent as well as price of a house also keeps rising. Hence, it is wise to invest in the right time. It can be considered as saving for one’s own future.
• The money grows as it is invested in the home, and you are free to decorate, renovate and change according to the desires.
Keeping the above factors in mind, one would go for rent-to-own accommodation to convert his house as his own house.