At Nest Egg Homes, we know that one of the best solutions for dealing with property in the current climate is to work with Rent to Own options. We know this from the perspective of the tenant buyer and the vendor. Please see our Youtube videos with accounts from a selection of our happy tenant buyers.
This is how we find it works for us:
1. We ask for a small deposit from the tenant buyer
2. Followed by monthly rent
3. Followed by a small monthly top up rent
4. The price of the property remains fixed for the Rent to Own agreed time scale. We find 3-5 years works well for us and suits our Tenant Buyers.
At Nest Egg Homes we find the analogy of Rent to Own being a lot like purchasing a vehicle on finance/ leasing a vehicle (something most of us have done and are comfortable doing).
So, when purchasing a car you leave the showroom having paid a deposit payment to secure the purchase of the vehicle. The equivalent to this is the small initial deposit the tenant buyer places when agreeing to purchase a property over an extended period of time. After you have driven out of the showroom you make monthly payments again securing the vehicle as yours at the same time as reducing the loan amount. With a Rent to Own property transaction this is where the monthly rent and top up rent payments are relevant.
The final stage of course is to secure the purchase of the property and having saved between a 10-12% deposit this means options to shop for a mortgage open up to the tenant buyer in a similar way with a car purchase; you have an option to return the car to the dealership in good condition or finance out the price of the car and purchase it. At Nest Egg Homes we call the individual looking to purchase the home a tenant-buyer because he or she is first a tenant, renting the property for an agreed-upon period of time, and later becomes the potential buyer – executing their Exclusive Right to purchase.
The Exclusive Right to Purchase means that, if the tenant pays the up front deposit, maintains the rental agreement by paying their monthly agreed rental money as well as their agreed monthly ‘top up’ money and wishes to purchase the home at the end of the rent to own contract, he or she has the exclusive right to purchase the home without the vendor putting it on the market. However, the individual is not obligated to do so; much like someone who purchases a car on finance can simply return it at the end of a contract. Usually, however, the person will decide that they don’t want to move and will obtain the mortgage loan that will allow them to purchase the home from you at the original agreed fixed price.
At Nest Egg Homes we find ideal tenant buyers are identifiable by the following characteristics or indeed set of circumstances…
• First time buyer struggling to get on the property ladder…
• People struggling to raise a large deposit…
• Currently renting and wanting to own a property…
• Have impaired credit and cannot raise finance…
• Recently moved to the UK…
• Returning to the UK from abroad…
To summarise, at Nest Egg Homes we know the rent to own process can help tenant buyers get into a house they otherwise would not qualify for and also help reluctant landlords or property owners stuck with properties that cannot sell on the open market realize their key objective to SELL. The tenant buyer places a deposit up front that then continues to pay an agreed upon amount for the terms of the rent-to-own contract. At the end of the contract, the tenant-buyer obtains the money to purchase the home. Everyone in the equation is a winner!
http://www.youtube.com/watch?v=wGF5zfBhfKA - link to a video interview from a satisfied Rent to Own landlord.
http://www.youtube.com/watch?v=SOFXksnjEDE&feature=related - link to video testimonial from satisfied tenant buyers.
For more information on how Nest Egg homes can answer your property needs contact Duncan Belton on 01642 880030 or email Duncan@nestegghomes.co.uk
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