Are you new to rent to own homes in Ottawa? In Ontario, lease-to-own or rent-to-own agreements operate in a manner that allows one to save for a down payment while renting a home. However, why do so many people prefer them? For February in two thousand and twenty-three, the median price of a conventional home in Canada’s capital was six hundred eleven thousand eight hundred and forty-five dollars. And this does suggest an increase from two thousand and twenty-two.
Let us begin our discussion by drawing your attention to the average cost of home insurance per year in two thousand and twenty-two. And you start to realize how jumping into homeownership can leave many people house-poor. The Canadian government wants to increase the number of homes over the next decade. And rent-to-own housing schemes are going to be more affordable for the average Canuck in the coming years.
What is Rent-to-Own in Ontario?
As the name rent to own homes in Ottawa implies, rent-to-own is a kind of contract in which a tenant is going to rent a piece of property for a given amount of time. And the tenant may also purchase it as soon as the rental term comes to an end. Under a rent-to-own agreement, the tenant pays a comparatively higher monthly rent. And a portion of the rent is applied toward the property’s purchase price if the tenant chooses to purchase it when the rental term ends.
Monthly Rent
What about the amount that you are going to pay in reality when looking for rent to own homes in Ottawa? It is highly dependent on the individual rent-to-own home and its terms. The actual rent payment would depend heavily on the home market value. Standard rent-to-own agreements also require an additional fee called rent credit, on top of the rent.
Admittedly, it is part of the rent payment that counts as a down payment on the purchase of the property. What to expect when you decide to buy the property? The rent credit accrued during the term of the lease can be credited toward the purchase. This is applicable to every rent-to-own scheme in Ontario. And this is no doubt good news!
How Much Does Rent-to-Own Home Typically Cost?
At the time of signing, an agreed-upon price is typically set in the contract to buy the rent-to-own home in question. Most rent-to-own contracts set the purchase price of the home at the beginning of the contract. Some let the tenant use the market value of the property toward the end of their lease. This does mean that you may negotiate the home’s purchase price closer to the day you buy it.
Even if the market value of the home declines while you lease it, you may not get a discount on the house. And that option is no doubt a viable one. However, a common tactic when home prices are ascending is to lock in the purchase price early. And you are essentially securing a potentially lower price when exploring rent to own homes in Ottawa. You may call us at Helping Homes to schedule a consultation!
