How Does Rent-to-Own Work? What is Rent-to-Own?
Time Stamps
00:00 🏡 Rent-to-Own Overview
Rent-to-own is an alternative path to home ownership for those who can't qualify for a mortgage.
It's beneficial for those lacking a down payment or facing credit issues.
The program requires a lower initial down payment, making it more accessible.
Rent-to-own locks in the purchase price, eliminating uncertainty in saving for a down payment.
A plan is provided to help clients accumulate the remaining down payment.
03:31 💰 Income and Qualifications
Minimum income requirements typically range from 20% to 25% of the home's value.
Clients need to qualify for the future purchase price based on their income.
04:11 💼 Option Payment and Down Payment
Clients pay an option payment in addition to rent, acting as a forced savings for the down payment.
The option payment is held by the program to use towards the down payment.
06:03 🤝 Benefits for Investors
Rent-to-own investments are more passive and have predictable returns.
Investors benefit from a concrete timeline and a clear exit plan.
09:17 🏡 Property Purchase Details
The purchase price is determined by historical appreciation and an annual rate applied to the rent-to-own term.
There's typically a cap on purchase prices (e.g., $750,000) to manage risk.
12:01 👥 Program Legality and Contracts
Rent-to-own programs are legal in Canada and comply with mortgage insurer requirements.
Clients can seek legal advice, but standard contracts are provided.
13:53 💵 Payment and Fees
The intermediary charges a fee for services, based on the purchase price and other variables.
15:00 📞 Contact Information
Reach out through social media, website, or email for more information and assistance.
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