Rent and buy is seen a godsend relief for many first time buyers. The deal is beneficial for buyers who do not have enough savings for a loan down payment or have poor credit scores. The scheme is favourable to both owners and renters. The renter enjoys the amenities of the house by just paying a small down payment and monthly rentals. The owner gets higher rent when compared to the market rates; part of the rent goes towards down payment of the house. This is similar to buying a house on instalment basis. The contract should mention the money transactions in detail. The owner and the tenant should read the contract carefully before signing them. Once the contract is signed both parties need to abide by the contract terms.

The payment terms should be explained carefully and put in writing. This facilitates the renter to get an idea of how much is required to be paid to own the house, so that he can plan accordingly. The owner also can get a rough idea when the payments will be cleared and the house bought. In normal circumstances, renting a house is very time consuming and difficult. To put and end to this problem rent and buy option is helpful. The renters select a property as per his choice and interact with the owner. Once the owner agrees the papers are drawn for signing. As the renter’s money is at stake they will be serious to clear the balance payment and claim the house as soon as possible. This way the owner stands to gain as he is able to sell the house fast without any difficulties.

Owner’s find rent and buy a convenient option in a stagnant market. In a sluggish market a house does not fetch the price required, during these times this deal comes handy. The renter pays rent for the house and finally buys the house, by the time the renter decides to buy; the crisis in the housing sector would have tided away. Therefore, they get a good price for the house as well as make money through rental during the decline period. The renter needs to pay taxes and insurance while on rent and buy scheme. This way the renter learns what it takes to be an owner of the property. They find out the pros and cons of owning a house. This could help them at the later stage when they acquire the property. This is considered a training period for renter as they can learn the practical difficulties of becoming an owner.

Another major point to be noted is that the contract period should be completed and cannot be aborted in between. Discarding the contract before the term is over is a great loss to the renter as they tend to lose the down payment and part of the rental amount that has gone towards the down payment of the house. Rent and buy should be chosen only when the renter is confident of keeping up their commitments.