At this point of time, significant deposits are also required. The banks limit their risk by insisting on a sizable investment as a deposit by the borrower and this has made it even harder for people to own a new property. You may be earning a good amount as salary which would make it easy for you to make your monthly instalments towards your mortgage but what about the deposit? How long would you save towards accumulating a good amount before you could enter that new dream home of yours?The good news is that this situation has led to the growing popularity of the rent to buy home deal. When difficult situations arise in any market, there are always alternatives that come up and renting the same property that you want to buy a couple of years later can be a very appealing option.
What is Rent to Buy?
Rent to buy or rent to own is an option open to those who want to own their dream home but don’t have enough resources to pay the upfront costs that are required by the financial institutions to lend you the cost of the new property.
By renting a new home with the long term plan to own it in due course, you will see the following benefits:• You can start living in a new property and you purchase it after renting it for a specific period depending on the agreement with the property owner
• You pay an extra amount that is added to your rent which is adjusted towards your deposit at the time of purchase. This is very helpful as over the time of renting a significant amount of money builds up (your initial deposit on renting as well as the amount accumulated over the years). At the end of the agreement period when you are ready to purchase and approach a lender for finance, this is used as your deposit.
• Rent to own option really makes the transition period between renting and buying much simpler and hassle-free as you are already settled into the home of your choice.
How to Buy a House in NZ Using Rent to Buy
Once you decide you want to utilise rent to buy to get into a home, approach a rent to buy specialist such as ourselves to discuss the ins and outs of the process in more detail and to help you find an investor. The investor will buy the property and then you rent to buy the property from them.
Once you are certain this is the way you should go, then all you have to do is find your dream home! Contact your real estate agent and choose the area you want to own your new property. The agent then arranges for a viewing of the same and if you think you have finally found your dream home, then let your rent to buy specialist know. Once all the paperwork is done (the house is purchased by investor, your rent to buy agreement is completed – a rent to buy is normally a 3-5 year rental period prior to buying) you are now the proud occupant of the new property which you may decide to purchase at the end of or within the agreed rent to buy period.
If you would like to find out more about the rent to buy process, please contact us today for a no obligation discussion.