How Rent To Own Can Benefit New Canadians
Rent-to-own is a great option for many New Canadians as it is difficult to qualify for a mortgage through a regular banking application, due to lack of income or a low credit score. Renting to own gives New Canadians the ability to own a home and giving them security and a chance to make a home for themselves. Rent to own is a great option for students and recent graduates entering the work force as well. Rent to own is like an investment which doesn’t pay in dividends but it provides you the means to own a home without paying the 20% needed for down payments.
Let’s talk about the Real estate market, our ever rising real estate market; which is great if you already own your home, but if your looking to buy a home then the rising cost of houses can be scary! If you currently don’t have the means to put a down payment on a home right now and the rising cost of homes does scare you, but you also want your rent payments to actually go towards an investment then renting to own is an excellent option for you. Let’s talk about the good stuff, the benefits!
- Equity: One of the biggest benefits is the rate at which you accumulate equity, without even actually owning the home. This is especially true in our Canadian market, where the prices of homes have been on a sharp rise.
- Security: A home is a place where everyone feels the most safe and secure. Homeowners enjoy more freedom to do as they please with their property as compared to living as a renter, this is primarily because homeowners are not subjected to inspections by the landlords. Homeowners also have the freedom to paint, alter and add improvements to the home without getting consent from a landlord.
- Stability: Being able to settle into a home for years and year to come is a calming, peaceful and great feeling as compared to the stress of being evicted by your landlord, finding a new place and adjusting to it. If you have children then your adding the stress of moving, changing schools and neighborhoods, making friends and much more to that.
- Option deposit is credited to the price of the home: The buyer/renter pays the seller an option deposit. This money is vested interest in the home and will be fully credited when you buy the home.
- Minimum expenditures out of pocket: When you purchase a home, not only do you need a down payment of at least 20% of the purchase price to qualify for CMHC Insurance, you also need money for closing costs. Whereas in a rent to own contract, you’ll only pay a normal rental security deposit plus an option deposit.
- Control of the Home: The buyer has full control of the home while paying rent, this is a great way to learn the ins and outs of the home ownership.
- No Taxes, Less Liability: Since the buyer does not yet own the home, they do not have to pay property taxes on it, this also saves you money in costs and gives you ample time to learn and adjust to the total cost of owning a home before you take full responsibility.
- Minimal Maintenance: Major maintenance problems that exceed a certain amount, already discussed with the owner are delegated to the seller.
Renting to own can be an easy, low-stress, inexpensive way to buy, sell or invest in real estate.