Rent to Buy & Own

How a Tenant becomes the Owner - an overview of 'Rent to Buy & Own'

NEWS FLASH- We have also just launched a forum all about Rent to Own, read Q&A from others, or ask your own questions. Click here for the dedicated rent to own forum at Simple2buy.co.uk/forum

Firstly, the terms Rent to Buy and Rent to Own refer to the same thing, a way of starting out as a tenant and ending up as the owner of the property you are renting.

For some Rent to Own is new way to beat the credit crunch and get on the property ladder, and if you read more you will find out just why this can really happen.

Put simply you find a property to rent and then agree with the landlord a right to buy the property for a fixed price at a later date. So you are starting out as a tenant, and then after say 2 or 3 years, ending up as the owner of your own home. Sounds too good to be true? Well, it really isn't, sure there are some advantages and disadvantages, but this really is an opportunity to get onto the property ladder and become a homeowner.

To get started you don't need a mortgage and you don't need a massive 10% or more deposit, it really is not complex - the hardest bit is finding a property available as Rent to Own - but Simple2rent can now help with this!

So, let's start with the advantages for the Rent to Own "Tenant-Buyer"

No more money wasted on rent, the rent you are paying will in most cases be similar to the mortgage payments, sometimes with part of the rent going towards your eventual purchase.

A chance to lock into a fixed price for the property, if prices rise 10% in 3 years time you only pay the original fixed price agreed, so in this case a £100,000 property would result in a £10,000 gain after 3 years. You can take your own view on property prices, but clearly if you take out a Rent to Own contract at the bottom of the market, or when prices are starting to rise, the gains can really be quite significant.

You can start living in your rented property as if it was your own home, making plans for the future. Some landlord-sellers may have a few restrictions but generally you should be able to redecorate and make the property a real home to live in.

A chance to improve your credit rating whilst renting, so when you apply for a mortgage in say 2 or 3 years time you will be able to negotiate a better deal. We have published an article here >> on how to improve your credit rating.

Gives you time to save for a deposit whilst renting. Some Rent to Own contracts will put part of the rent toward the eventual purchase, whatever the case you will have time to save those additional funds for a deposit.

You can change your mind and walk away without buying the property. Whilst you don't want to go into this unsure of whether you want to buy, at least you have the option to change your mind later, in effect you get to "try before you buy" ... how many property buyers get that opportunity?

The deposit needed to start a rent to own is much smaller, typical around 3% (it varies), this compares to 10% or more deposit for a mortgage today. And there is normally no additional rental deposit required, so the cost to move in is not that much higher than it is for a normal tenancy contract.

As to risks, there are some that you should be aware of as a Tenant-Buyer

No one can guarantee property prices will rise in the future, so to offset this risk make sure you do your research on the property market before committing.

If you decide not to go ahead with the right to buy you will lose your deposit. So you need to be sure it really is a property you would like to buy before committing.

You may not be able to get a mortgage in 2 or 3 years time. To help reduce risk speak to a financial advisor, get advice on your situation and prospects for a future mortgage and in the mean time taking action to improve your credit rating is a major benefit here.

Sounds like something you would like to do? Then what next?

Firstly you can start to search for rent to buy properties here on Simple2rent, just click on the Rent to Own option next to the search button. And if you don't find what you are looking for today, you can also register on www.Simple2Buy.co.uk and we will then email you when a property comes in matching your requirements.

Remember that Simple2rent is UKs website for the rapidly growing Rent to Own market, and our website is FREE to use for everyone, no fees, plain and simple FREE, we will always be a free service website.

We have also set up a FORUM where you can ask questions about Rent to Own and understand more about how this can work for you.  The Rent to Own forum is www.Simple2buy.co.uk/forum

We strongly recommend that you go to the Simple2buy forum, read posts, ask questions, it is a great palce to learn about Rent to Own.

Some other related Rent to Own resources you may find of interest

Rent to Own FORUM - questions and answers about Rent to Own / Buy at Simple2buy/forum

Articles about Rent to Buy and Rent to Own

MS Law Rent to Buy Article

How to improve your credit rating