A Better Understanding of the Rent to Own Homes Process

Written by Posted On Tuesday, 28 May 2019 00:33

In Australia, most people face a storm of rising living costs. With wages low, and usually slow but growing and increasing, this affects the property market as well. Increasing house prices are pushing people away from homeownership. This urges them to turn to rent schemes, and they end up facing impossible challenges of saving for deposits. However, most aspiring people are turning to alternatives. Now, people consider rent to own homes schemes as their top choice.

When considering rent to own schemes, this makes it easier for you as a first time home buyer to climb onto the property market ladder. However, this is something that may come with risks. Below is a break down on how to start the rent to own process.

Starting the Rent to Own Process

When considering the rent to own scheme, there no denying the fact that it comes with many challenges and sometimes, risks. However, if you are sure this is the best option for you at the moment, here are the important steps you need to consider.

  1. Find a Suitable Property

Considering the fact that some things may go wrong for renters and sellers, it’s a challenge to find buy to rent properties today. This is why it is often time-consuming to find a suitable property to fit these options. For this, it is often advisable that you consult experts like those at Stop Renting Perth. Such experts are building consultants as well and can help people like you in Perth to get out of the rent trap and own your very own property. With professional help, you can either own land first and then proceed with the building process or invest in ready to move properties. This entirely depends on your finances.

  1. You May Have to Secure a Home Loan

Once the rental period comes to an end, and you don’t have enough money to pay up for the home, you may have to take some home loan. Although this is not advisable and most experts will help you manage your finance, this can be the last resort. You should evaluate what to expect from the bank or a lender, and check the interest rates and similar details.

  1. Investigate the Quality of the Property

Once you are able to find a suitable home, the next step is to probe deeper and determine what’s best in terms of the investment. You have to evaluate the condition of the property. As soon as you find a property that you feel is right, you should think of sealing the deal. Kickstart the process by inspecting the building. You should consider carrying out a detailed valuation of the property. If possible for this you should hire experts.

  1. Consider Seeking Legal Advice

Another important aspect is to seek legal and financial advice before you consider the rent to own scheme. This will help and keep you away from entering debt. You should consult a local solicitor who will draft a contract. This will include relevant clauses that outline the amount of your rent that should go into building the home. As a tradesperson, you should consider making a deal with the property owner to cut down the rent cost in return for minor home improvements.

  1. Investigate More Details about the Seller

This is an important step because as you enter the rent to own final agreement, it ties you to the financial circumstances of the seller. In case they default on their mortgage, in this case, the bank may end up repossessing the home. This will only leave you out of place and empty your pockets. Hence, you need to take your time and investigate more details about the seller. Ask the seller about the reasons why they are selling through this agreement (the rent to own agreement). You should also ask them for valid documents that prove their financial security.

  1. Pay the Rent on Time

As soon as you sign the deal, it’s all up to you to keep it working. It is best that work on a budget. Stick to it and do not miss payments. If you do, this can be a terrible phase for you and your family. It may push you on the street, and drag them along as well.

  1. Finally, Buy the Home

After spending years pumping money on rents, it’s time you finally own the home. Once the rent period ends, you will get hold of the keys and it’s finally time to celebrate!

Even if you have bad credit, it is possible to consider rent to own homes. Just make sure you seek the help of the right experts and building consultants who would be able to guide you on the entire process. Ask them for every detail, ask questions freely and you will be a step closer to having the keys to your own property in Australia!

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