The Canadian housing market has seen unexpected ups and downs in the recent past. This has made it tough for the average Canadian to buy a home, pushing prospective buyers to find new ways to get into the real estate market. One unique approach people are increasingly taking these days is to sign up for rent-to-own homes in Ottawa. Rent-to-own property contracts give you a chance to work your way toward owning a home.
What are Rent-to-Own Homes?
A rent-to-own property agreement is based on a standard rental contract between a landlord or landlady and a tenant. When you opt for a rent-to-own deal, you still need to pay rent each month. The twist is that your landlord puts aside part of your monthly payment. This money is saved up in case you decide to buy the home when your rental period ends.
People call this saved-up portion a rent credit. Sometimes landlords ask for extra payments on top of your monthly rent to give you rent credit. If you’re thinking about a rent-to-own offer, keep in mind that to finish the purchase, you’ll still need to pay the rest of the down payment, get approved for a mortgage, and buy the right property insurance.
How Do Rent-to-Own Property Agreements Work?
Different rent-to-own property agreements have their own rules and conditions. In Canada, when it comes to rent-to-own homes in Ottawa, you can enter into either a lease-purchase or a lease-option agreement.
What are Lease-Purchase Property Agreements and How Do They Work?
The former kind ranks among the most widespread rent-to-own arrangements in the country. When you sign one, you commit to buying the home once the set rental period ends. Landlords ask renters to pay a non-refundable deposit to enter into this type of agreement.
If you decide not to buy the house after your lease-purchase property agreement ends, your rent credit and deposit won’t be refunded. Your landlord may also ask for extra fees at times. This makes it crucial for renters to read the fine print carefully beforehand when it comes to rent-to-own homes in Ottawa.
What are Lease-Option Property Agreements and How Do They Work?
The latter kind gives renters the chance to buy the home after the set rental period ends. When you enter into one, you don’t necessarily have to buy the home later on. You can decide to purchase the home or move to a different place. This sets lease-option agreements apart from lease-purchase agreements. However, keep in mind that renters may lose their deposit if they don’t buy the home, just like in lease-purchase agreements. You should check your lease’s details to see if you can get your deposit back or not. This is something to ponder before you agree to a rent-to-own deal.
Should You Opt for a Rent-to-Own Property Agreement?
You can’t give a simple yes-or-no answer about whether or not to sign a rent-to-own property agreement. It all depends on what you want, how stable your finances are, and where you picture yourself down the road. Let’s say you’re planning to start a family and want to stay there for a long time—where your preferred rent-to-own is situated.
In this case, a rent-to-own property agreement may give you a leg up on other people looking to buy homes. However, if you’re not sure where life will take you soon, investing in rent-to-own homes in Ottawa may not make much sense financially. Call Helping Homes now to schedule a consultation at your convenience!
