Rent to Buy is simply a way to buy or sell something, except that the transaction does not take place immediately. The buyer and seller basically agree to the possibility of a sale sometime in the future, usually in a few years' time, and draw up a contract agreement. In the meantime, the Rent to Buyer lives in the property, and pays rent to the Rent to Seller, which also contributes to reducing their house deposit when they go to purchase the home in the future.
This agreement drawn up for a Rent to Buy property through Homes with Options has positives for both the Buyer and Seller, and the flexibility of each individual contract means it can cater to both sets of needs.
Buyers
For Rent to Buyers, one of the main benefits is the ability to live in your ideal property sooner than you thought. This allows you to begin any desired work or home improvements to the house, and begin creating your ultimate home before you've technically purchased it. It means you don't have to wait and rent somewhere else while you're saving up for a deposit, and if you have found your dream house you can secure it already, even before you can fully afford to.
Rent to Buy also means that you aren't throwing away your rent money into a property that you have no investment or future potential in. When you are contributing rent in this scheme, you are contributing towards your future home and your deposit, making it far more of an investment.
It works for you when you aren't fully able to afford a mortgage or house deposit immediately, but also when your credit score is bad or in need of improvement. Rent to Buy offers you a few years to improve your credit score, allowing you to wait until you are completely financially ready before purchasing the home.
Another benefit is that you have the ability to lock in a purchase price at the time of the contract being drawn up, in case home prices rise over the next few years. This means that both Buyer and Seller know what the ultimate price of the property will be, and that price doesn't change at any time throughout the contract.
You can opt out of the contract and finally purchasing the Rent to Buy property at any time, although bear in mind that you would have to compromise whatever money you have already contributed to the home. However, ultimately, the benefits and positives of Rent to Buy from the Buyer's perspective greatly outweigh any potential negatives.
Sellers
One of the most important benefits for the Seller is that you have a greater opportunity to sell your property. If you are finding difficulty in gaining interest for your house or losing any potential sales, then Rent to Sell could be for you. If your property has been empty for a while and you are having trouble paying for the mortgage, then we can set you up with a Buyer who can live in your home and cover your mortgage payments for this property.
Another benefit is that you would have peace of mind that the Buyer tenants were taking care of the home, and it would be a different situation to having regular renters. You wouldn't have to act as a landlord to deal with them or the property, as all of the home improvements would be down to the Rent to Buyer, as part of the agreed terms to eventually purchasing the house.
If you were to Rent to Sell your home, you could also be certain of a fixed price for the property, and wouldn't have to settle for less than you believe the house is worth. At the beginning of the contract, a price would be decided and that wouldn't change. Even if the house price drops over the next few years, you would still have the top fixed price that had been decided at the start.
Another benefit for Renting to Sell is that you can opt out at any point throughout the contract. However, bear in mind that you would potentially lose your right to keep any of the money the Renter has put towards the property deposit.
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