The real estate market in Canada grew in 2021 and this has continued throughout 2022.
Prices of homes in the country have skyrocketed and citizens in Canada and North America, in general, are having trouble buying property.
One way for you to navigate around this hurdle is to consider a rent-to-own property. This is where you rent a property and have the option to buy it after your rental agreement terminates.
Here’s what you need to know about rent-to-own homes:
How Rent-to-Own Property Works
You’ll have to choose a property that’s eligible for the rent-to-own agreement. You can use this site to help you find a great option in Ontario.
You and the homeowner will decide upon the option fee. This is a fee that you pay once before you sign the rental agreement. It’s similar to a deposit that you’d pay before you rent a home or apartment.
But you won’t receive your option fee back. This option fee forces the homeowner to set aside a duration for when you can buy the property. During that set duration, they can’t sell the property to anyone but you.
You can then decide during the course of this period if you want to buy the property. For example, you might rent the property for six months. Afterward, you might have three months to decide if you wish to buy the property.
Those three months are yours and yours only to buy the property without any competition from other buyers.
Pros and Cons
Now let’s look at the benefits of rent-to-own properties and the disadvantages of rent-to-own.
The major advantage is that the right to buy is guaranteed for a certain time. However, if you decide not to buy the home you still won’t get your option fee back.
When you choose the rent-to-own option you’ll have the full experience of owning a home. For some, this is an advantage, but for others, this is a disadvantage.
For example, you’ll likely be responsible to pay for maintenance. You’ll have to pay to renovate your home, fix your roof, or replace your appliances.
You might even have to find the right people for the job. The homeowner won’t bear any responsibility for this. But this also gives you more control over the home as if you own it.
You have to determine what you’re willing to put up with and sacrifice to decide if rent-to-own homes work for you.
Find Your Home
Now you know how rent-to-own property works and can decide if it’s the right option for your goals.
You have to first find your ideal property and strike a deal with the homeowner to rent the property. You’ll have to negotiate the option fee and the buying period.
Consider the different benefits and disadvantages of rent-to-own property. You’ll have to decide whether it’s worth your time and investment to choose this option.
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