by Jeff
14. August 2011
One who's on a constant search for cheap housing may consider renting, however you'll soon realize that renting is not made for long term family scenarios. As rent constantly burns your pockets and rarely gives you anything in return for the money you put down on it. Rent to buy on the other hand is something that's similar to renting, but does not necessarily take its toll on your cash but instead gives you a return for your investment in the long run. We're talking about a year or 2 years of renting with the possibility of owning the property once you have enough cash through a mortgage or a loan.
The idea behind rent to buy is to give buyers the opportunity of getting them a dwelling through renting and having time to save up on funds or obtain a loan or mortgage for future home purchase. A certain percentage of your weekly repayments would be applied to the actual purchase price of the property making for a substantial reduction in cost giving you the fulfillment that your rent money worked for you in the long run. Practically, obtaining a home or investing takes time and resources. Some have the idea that rent to buy is a shortcut to their dream homes without any down payment or deposit; whereas this isn't the case as looking at things from a business stand point, a deposit is considered a minor collateral for lending ownership and lowering risk for the seller.
Someone out on the market for their dream home certainly have made up his/her mind that buying a house is for them in the long run. Thus, saving up cash for the day of purchase is essential to make certain that the transaction would go smoothly and without issues. Sure, you say “I’d just go to the bank for a loan or mortgage rather than put 15,000 on a deposit” But not everyone is eligible for a bank loan or mortgage and would depend on a case to case basis. What about bankrupts? or people who are a bit short on their credit history? This is where rent to buy works well because it doesn’t necessarily base a buyer’s qualifications off of credit history alone.
Sure there may be some risk for sellers, with people who have low credit standing, but then again that’s why there’s a deposit requirement as this serves the purpose of security for the seller. Through the qualification process, prospect buyers have a chance to look up to saving up for their dream homes and investing in their family’s future.
So if you’re one who’s been wanting to get your own home sooner, and can manage to save up or obtain a loan in the future then rent to buy is the solution to your housing needs. With Virtually hundreds of diverse properties to choose from, you no longer have to limit yourself to that small house around the block. Who said you don’t have what it takes to live like a king? with Rent to buy, stay now and own sooner.