Rent to buy method emphasizes a lease plan with an option to buy. This option has its own merits and demerits; therefore a buyer has to be careful while choosing this option. Rent to buy if followed as per the contract is the best way to own a property in Australia. This option had been in use for many decades now and many people have benefited through this option to buy a property. In a rent to buy method the owner rents the house to the buyer initially. The buyer enters the house as a tenant. This arrangement is made for a stipulated period of time that needs to be mentioned in the agreement. The term period is discussed by the owner and the buyer. They come to terms about the time period. Once a decision is taken the contract can be drafted after finalizing other financial terms.

Many sought to this option because obtaining a home loan involves number of criteria. The banks and lending agencies are getting stricter day by day following the financial meltdown. Many banks are facing sub prime crisis due to their leniency and are paying hefty price for their mistakes. Hence, acquiring a loan through normal procedures is not going to be an easy task. This is where rent to buy option can help. The prospective buyer can start as a tenant and step by step become owner of the property. Adequate time is given to the buyer to gather funds for the property.

First a small down payment is required to enter into an agreement. This amount can vary between 5 percent and 10 percent depending upon the seller and the monetary conditions of the buyer. The buyer should keep in mind his financial status. Buying a house is a huge investment and the decision should not be taken in haste. A thorough discussion with the members of the family is vital before taking up this huge responsibility. Budget your household expenses, there are may be emergency expenses in the family like medical, education, wedding, etc, you can keep in mind all these possibilities and then come to a conclusion on the buying option. Once a decision is made you cannot revert as money is involved.

A down payment needs to be paid to the seller and this amount is non refundable. The amount though is deducted from the price of the property. Likewise the rental amount paid also is on the higher side. Also note that part of the rental amount is added to the down payment. Through this arrangement, half the buyer’s burden is reduced. The buyer needs to arrange for the balance payment and this will be easy for him. There are many lending companies that are ready to offer affordable loans and the buyer can use this to clear the balance amount within the due date. The buyer should from the day one look for alternatives to arrange for money. Rent to buy method is an attractive option for many first time buyers as well as immigrants in Australia.