Rent to own real estate properties are already popular in Australia, and their target market are those who do not have enough funds to purchase a property making a one-time payment or those who are not qualified to apply for home loans or mortgages.
Yes, it sounds interesting but buyers must know the advantages and disadvantages before getting one. Here are some examples of the benefits of this rental scheme:
- The owner / seller of the property will only require the buyer to give a partial payment which is a percentage of the total selling price. The down payment range could be from 20% – 50%
- You can already move-in to your new house just right after handing over the down payment.
- Just like other countries, mortgage and banks companies in Australia are somehow hard to please. But, with rent to own schemes, No need for loan application which requires a lot of documents and proofs for approval.
- You can have your own house by installment buying.
But, the downside of this payment scheme are:
- The monthly lease is more expensive than a regular home rental.
- Remodeling, expansion or major reconstruction of the real estate property is not allowed unless fully paid
- Some sellers apply penalties for late monthly payment
- If the buyer can no longer pay for the monthly rent, the seller can ask them to move out and the down payment will be forfeited.