Houses, cars, appliances, gadgets, etc are so expensive these days. Good thing is that we have rent to buy scheme. Both buyers and sellers can benefit from this type of arrangement, but it is important you also understand its risks.
Rent to buy is a worldwide scheme, designed for people wishing to purchase or sell something over time. It gives buyers an option to live in their dream houses or drive their car which they intend to buy at some point in the future.
Unlike the traditional purchases, the buyer and seller in the rent to buy scheme does not complete the purchase more or less immediately after agreeing to terms at closing. Under this term, the buyer and seller agree to the possibility of a sale at some point in the future.
Ultimately, the renter or buyer decides if the transaction will actually take place. In the meantime, the seller receives payments, and a portion of those payments usually reduces the money needed to buy the house at a later date.
Rent to buy scheme is designed to ease the transition between renting and buying and allow people to be able to afford to buy their own home quickly and hassle-free. For example, when you have found the right house that you want to rent to buy, you, as the buyer, have to put down a deposit on the property.
This deposit will be significantly less than most require, and you can put down as much as you want. The difference is: with a small deposit, you will have to pay more monthly rent towards the property, whereas with a larger deposit, you can look forward to paying a smaller monthly rate.
On the other hand, rent to buy scheme also has disadvantages. To learn more about this type of scheme, click here: https://www.moneysmart.gov.au/borrowing-and-credit/other-types-of-credit/rent-to-buy