Rent To Buy Agreement South Africa

While these tenants would still be forced to make the purchase through traditional financing channels – including money for deposits and fees – the first right of refusal and the ability to live in a property before deciding whether it is worth buying are important benefits of rental purchases. Rent-to-Buy, also known as Rent-to-Own, is where there is a rental agreement between the tenant and the landlord that provides for the tenant to lease the property for an agreed period and at the end of that period, the tenant has the option to purchase the house from the landlord. The „purchase“ or „sale“ component of the tenancy, called the deed option, allows the tenant to buy the house and move into a loan agreement at the end of the rental period, he continues. However, the biggest advantage of rent-to-buy is that it offers a tenant a bad credit interest rate or a young buyer a low credit interest rate, which is not eligible for a loan, the period to get a healthy credit history or save for a deposit to buy a home. With South Africa`s current economic status, potential homeowners could consider the „Rent to Buy“ option. „It is often necessary to pay an option fee in advance, plus additional current option fees, in addition to agreed rents. These fees help the buyer build a security deposit so that at the end of the rental period, they have a smaller balance to pay the value of the agreed-upon real estate if the purchase continues,“ he explains, noting that this can be particularly useful for young homebuyers. The concept of own rental is not new,“ says Barry Fourie of Rawson, „but many people don`t know it`s an option for real estate. This can be risky for both parties, so it is important to fully understand what you are getting into before you accept anything, but there are situations where this can be a viable solution. A written agreement between two or more people („partners“) with the intention of doing business together by combining money, skills and/or other resources (a „contribution“) with the objective of the interest. „Rental-to-own or lease-to-purchase systems are effective leasing agreements that provide for the leasing of a property for an agreed period of time, plus additional payments, and at the end of a while, the tenant has the chance to buy,“ says Dyer, adding that the systems allow buyers – usually those who are unable to save a deposit and provide traditional financing – without having to „enter a house“ at no significant cost.