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So What Makes It Better Than Rent 2 Own?

The answer is simple. Rent 2 Own is a great idea, but in many cases it simply does not work. There are too many variables. What if the market goes up? What if it goes down? What if we can't get a mortgage? What if we decide we don't want to buy the house? The list goes on and on. Rent to own is designed so that the seller wins no matter what. Better Than Rent 2 Own is designed to make it fair for both parties.

The answer is a Purchase Option.

How Does a Purchase Option Work?

A lease purchase contract is a shortened name for lease with option to purchase contract. It is a form of real estate purchase which combines elements of a traditional rental agreement with an exclusive option of right of first refusal to later purchase the home.

These contracts are commonly used where a buyer wants to purchase a home, but due to credit issues, job situation, self employment or lack of down payment, would not qualify for a conventional mortgage.  

Under the typical terms, the tenant/buyer chooses the home and seeks a landlord/seller to serve as an investor. The tenant/buyer then agrees to a lease period, during or after which the tenant/buyer has the exclusive right to purchase the home at a previously agreed-upon price, or more commonly a price to be agreed to at a future date when the tenant/buyer has qualified for a mortgage.

Should the tenant/buyer not wish or be unable to purchase the house, the tenant and landlord can agree to extend the option period, convert the lease purchase contract into a traditional rental agreement, or end the contract with the tenant moving out and the landlord seeking other renters or buyers.

What makes Better Than Rent 2 Own different than regular rent to own is that this Option Agreement is exactly that. It's an Option. You're never obligated to buy the home if something comes up and you decide you can't, or don't want to buy it. See? It makes it fair for both parties. You enter into the lease with the INTENT to buy the house. Landlords like that. Persons planning to buy the home will usually look after it better than someone who just wants a place to hang their hat for awhile. 

Our mortgage broker is one of the first people you will meet. We'll make sure that you're able to actually afford the home. We'll aid you in setting up savings plans for your down payment. Best of all we stick with you. Most of our clients are with us for 2-5 years. We'll do regular check-ups to make sure you're on track and ready to buy at the end of your lease term. If a problem comes up, we're here to help.

Here are the key features that make it work;

• No huge investments.
• Flexibility. We will negotiate as long a lease term as you need.
• Your down payment savings go into your RRSP or tax free savings account. You do not give these savings to the landlord/seller until you actually purchase the home. You're safe and secure and we're here to protect your money.
• It's fair. You don't want to agree to pay $410,000 for a home that may be worth $390,00 when you're ready to buy. We'll be here to help you determine a fair offering price when you're making your offer.
• Experience. With over 25 years experience in Victoria Real Estate, you're in safe hands with us. We'll guide you every step of the way and keep everything smooth sailing.

To get started, simply complete the information form by clicking here

Frequently Asked Questions

Q. Can the landlord kick us out if they decide to sell the house?

A. That's our most popular question! You'll find this to be interesting reading and a clear answer to your question

http://www.rto.gov.bc.ca/documents/GL30.pdf 

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Q. How does this Better Than Rent 2 Own work?

A. It's actually quite simple. Better Than Rent 2 Own is a customized system for people to own a home that do not qualify by conventional means. If you have credit issues, lack the required down payment, job history or self employment then Rent 2 Own could be for you.

You agree to lease a home for a set period of time. This is called the Term. At the end of the term (usually 2-5 years) you purchase the home with your own mortgage. A portion of your monthly rent goes toward your down payment. Here is an example of how it works;

EXAMPLE

Let's assume $1850 is as much as you can afford for rent . Let's pretend the purchase price is $400,000.

Purchase Price                                                              $400,000

Required down payment for a mortgage (5%)              $ 20,000

Monthly Base Rent                                                       $ 1500

Budget for down payment per month.                          $ 350

Total Monthly Payment                                              $ 1850

For Clarity... in this example, you are putting $350 per month into YOUR OWN RRSP or tax free savings account. You do not give it to the owner of the house until you purchase the home. This way, your savings are 100% risk free. Should you choose to purchase a different home at the end of the lease term, you are free to do so.

If the term was 5 years (a lot of them are) you would have $21,000 saved for your down payment!

Remember, this is just a simple example. We have many ways of customizing Better Than Rent 2 Own to make it work for you! One of the most common and easiest ways is to consider a home with a suite. *A Caution Here...If you choose a home with a suite, you are responsible for the entire lease payment, even if the suite is vacant.

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Q. Do I need a down payment?

A. Not immediately. All you need is $5,000 to get started. Over time you will build the required down payment for your new home. By law, you require 5% of the purchase price as a down payment to purchase your home. Most banks and financial institutions want you to have an additional 1.5% of the purchase price in your account for closing costs. Our experts will show you to simple effective ways to build your down payment and repair your credit if necessary. Many of our clients can qualify for a mortgage in 2-5 years. You'll have your own mortgage, you'll have your own control.

Hove you ever been perfectly happy in a rental home and then evicted because the landlord put the home up for sale or decided to move in? That won't happen here. You're protected by a long term lease and home owners that are excited to have you buying the property.

Q. What makes you different from other Rent 2 Own companies?

A. Flexibility. We do not have all of our policies set in stone. Purchase price, term of tenancy (before you actually buy the home) are all negotiable. Our biggest advantage over 'regular' rent to own is the fact that you are not locked in. If you choose to not purchase the home, you are free to buy whatever you like.

Q. Can I add to this down payment over time?

A. Of course! This is what we are all about. The idea is for you to build up your down payment over time. The banks require a certain credit score and a minimum 5% down payment. A portion of your rent goes toward your down payment. These funds are NOT held by the home owner. They're held by you and invested each month into an RRSP Loan. It's important to use an RRSP Loan or a Savings Loan to make sure you're building your credit as you go along. The plan will be customized to your particular situation. When you have total funds of 5% down, we'll have dealt with any credit issues, job problems or other situations. We will guide you every step of the way and make sure you can purchase your home when you're ready. This term is normally 2-5 years. If you need more time, not a problem. All of that is set-up before you move in.

Q. What if the term comes and goes and we still cannot complete the sale?

A. The term of the lease has a clause to protect you. Most of our leases are 2 years with a 2 year option to renew. If after 4 years you still cannot buy and the landlord wants to move on, we'll find you another Better Than Rent 2 Own home for no extra charge...... as long as you've been paying your rent on time!

Q. What if we decide we don't want to continue and move out?

A. No problem. Buying the home is your choice and is never something you have to do. However, you do not receive a refund on your initial $5,000, but the funds you have accumulated in your RRSP are yours to keep. As always, there is no substitute for sound legal advise. We recommend you speak to a lawyer before signing anything relating to a real estate purchase.

We LOVE getting your emails with your thoughts, questions and ideas. Last week we had a very thoughtful inquiry full of awesome questions. I really appreciated the time and thought put into these quality questions. I thought I'd reprint them for you here. :-) Tony

My questions are more specific to this house.

How much are you estimating the value of the house to be? ​Market value for our properties are determined when our clients have a mortgage and are ready to make an offer. Homes like this are currently selling for $700k to $800k in this area.​

If the Rent to own is $2,100 per mos, how long is the rent to own term for? 5yrs? and then I would be obligated to purchase or lose my investment?​ No, what you are describing is rent to own, our product is a Purchase Option which is much safer. In a rent to own, yes you would lose all your invested money as you have just described. In a Purchase Option, your savings stay in your account and do not go to anyone else until you are ready to buy. This makes it much safer and permits you to buy any home within your budget.​ The term can be for any length you like. Most of our leases are 2 years with a 2 year option to renew. This is referred to as the 'term'. The term can be negotiated to suit everyone's needs.

If the owner wishes to sell prior to the end of the term I understand I would have first right of refusal to purchase at that time but if I was unable that the owner could sell and again I would lose my investment, is that correct?​ Yes, you will have a right of first refusal.​​Again, no you never lose your investment with a Purchase Option. With rent to own, yes, you lose all your money that you have put in if you don't buy the house. All of your money stays safe and in your account. You're free to buy whatever you like. Our job is to find you a mortgage. That's what you're paying us for. Yes... we will find you a house to, but we do not obligate you to buy it. ​

What if I want to make modifications to the home during the rent to own term?​We caution all of our clients to not put too much money into renovations. If it's just 'paint and paper' that's fine, people do that to rentals all the time. We find that over 50% of our clients do not buy the home they have been living in. A funny thing seems to happen once they get approved for a mortgage. They begin shopping for the perfect home. Quite often they find something else and purchase it. And that is just fine! We want you to be happy with your home and buy the one that is just right for you. That's why we keep things flexible and safe.​

How does a home inspection work? I think I'd want a home inspection. I noticed the house has an above ground oil tank. Are there other potential tanks buried? Has there been a scan done for them? ​A home inspection runs about $400-$500 in our area. Most of our clients only do an inspection to a home they are ready to make an offer on. During the rental period, you'll be getting to know the house and the repairs required, but we highly recommend an inspection before purchasing. We have a few excellent inspectors here in Victoria.

Q. This sounds like exactly what we are looking for. How do we get started?

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