Renters

The Rent to Buy Scheme

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The Rent to Buy SchemeMany potential buyers in today’s market face the difficult task of getting a deposit together to satisfy mortgage criteria while at the same time paying rent. If you currently are a renter and would like to buy a place of your own but are not financially in a position to do so then the Rent to Buy scheme might be for you.

 
How does it work?
In short; The rent to buy option where you rent for a certain period of time e.g. 2 or 3 years and at the end of those years if you decided you would like to buy all the rent you have paid will be offset against a deposit.

Some people have called the scheme the ‘try before you buy’ option. The scheme works similar to a lease option agreement in the commercial market giving you have the option to buy the property you are already living in on an agreed date after a certain period of time – usually 3 years, at pre-agreed price. At the end of those years if you decided you would like to buy the property all the rent you have paid will be offset against a deposit. If at the end of the three year period you decide you do not want to buy the property then you are under no obligation to buy it and can walk away.

What’s so great about Rent to Buy?

  1. Rent has traditionally been seen as dead money and these schemes allow you to put some of that money towards saving up a deposit for your future house.
  2. If you would like to buy a place of your own but are not financially in a position to do so then this scheme provides those who want to get on the property ladder a chance to do so.
  3. You have the option to say yes or no.

Any catches?

  • The pre-agreed price! i.e. property prices may drop further than the fixed price contract that you have agreed / signed. But then again property price may also drop!
  • If you opt not to buy you’ll more than likely lose your deposit you paid at the beginning of the agreement. The deposit paid could be €3000, €5000 or 2% of the purchase price. This is not usually refundable.

Rent to Buy Schemes currently on the market
The rent to buy scheme is not readily available everywhere, it is a scheme only some developers offer. Some rent to buy schemes advertised on MyHome.ie include;

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