Many 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?
- What’s so great about Rent to Buy?
- Any catches?
- Rent to Buy Schemes currently on the market
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.
- 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.
- 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.
- You have the option to say yes or no.
- 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;