Home > Real Estate, Rent2Buy Concept, Uncategorized > Rent-to-Buy Program Takes Off in South Africa

Rent-to-Buy Program Takes Off in South Africa

The National Credit Act has made it difficult for potential home owners to get the loans they need to finance the purchase of a new property. This inability to get a loan makes it more difficult for these people to enter the housing market. Both first time buyers and the self-employed are particularly affected by the Act. Reports show that close to 50 percent of employed bond applicants are declined each month. An even more startling statistic is the 58 percent of self-employed applicants who are denied home loans.

A new concept is revolutionizing the South African property market. The introduction of a new Rent2Buy program in the area will provide buyers and sellers with an alternative way to conduct transactions. Meyer de Wall is the founder of Rent2Buy as well as a practicing attorney. According to De Wall, “We negotiate agreements between potential buyers and sellers whereby the buyer concludes a rental agreement with a seller with an option to purchase the property by a certain date and at an agreed price.”

Rent2Buy works by assuring the seller a set price for the property in the future. The buyer of the property pays rent in an amount that is approximately equal to the buyer’s future bond repayment. A unique aspect of the rent to buy transaction is that buyers are able to take immediate ownership of the property. Because they are taking over responsibility for the property, they are able to treat the home like it is their own and make changes accordingly. They will also be responsible for any rates, taxes, levies and maintenance.

“The idea is that the buyer uses the option period of the contract to prove his affordability and creditworthiness to the bank,” De Wall explains. “This way the buyer can eventually secure a loan to purchase the property. In addition to using the time to save for a deposit, he also shows he can afford the property and be disciplined by paying rent regularly and on time.”

Rent2Buy launched a home owner education programme with the goal of training and mentoring bond applicants and helping them succeed at securing a home loan. The My Budget Fitness programme will improve an applicant’s credit rating and put him on the path to being financially fit for a loan.

The programme was developed in association with Solly Molefe of Setsmol Training. “The programme is unique as it assigns personal budget trainers to applicants and uses innovative software to help home loan applicants track their progress and reach a financially fit state,” Molefe says. “Through mentorship, education and month-by-month guidance, home loan applicants reach affordability and clear their credit record as required under the National Credit Act.”

The My Budget Fitness Programme is available to anyone looking to secure a home loan, not just Rent2Buy customers.  The hope is that allowing everyone access to this type of program will improve the ability of anyone seeking a home loan to achieve their goal of being financially fit to be approved for a bond.


  1. mehmood
    November 21, 2010 at 10:12 am

    rent to own is a very fantastic concept. infact as a developer i am lookig at these method to sell houses.need to formulate a water tight contract to be benificial to the seller as well as buyer.

  2. December 9, 2010 at 6:30 pm

    I’d quite like to see this concept take off more in the UK. We have a concept of shared ownership which is similar, but a more widespread rent-to-buy would be a useful option given the challenges first time buyers face!

  3. January 14, 2011 at 9:02 am

    Hi Martin,

    I’m doing many rent to buy deals in the UK. I belive this technique will really take off in the next few years.
    I have a south African property i would like to move on in this way. Any advise on solicitors that know how to draw up the correct contracts ?

    Thx Sean

  4. Edna
    February 22, 2011 at 2:00 am

    How can we go about to rent2buy a house at this stage i can’t affort to buy a house but if i can rent and make someone else rich i might as well do it for myself

  5. June 22, 2011 at 7:58 am

    Afternoon, we at Oosthuizen & Co Meyer de Waal, under the leadership of Meyer de Waal (the attorney referred to in your abovementioned post) are leading the way with regards to rent2buy in South Africa.

    You may follow our blog on http://www.oostcomeyerdewaal.wordpress.com.

    Would appreciate all comments and or suggestions.

    Kind regards.

  6. mehmood
    July 1, 2011 at 2:51 pm

    as a developer iwould like to know the following with regard to the concept of r2b:
    > can i sell houses of the plan
    > with buyers commited and signed r2b contract, will the bank finance a building loan on the company name.
    i want to develop affordable housing ; banks as well as government
    funding institute fund presales projects.
    i would like to introduce this concept in this area.

    mehmood ( mehrah property investments)mehrahprop@gmail.com

    • July 2, 2013 at 10:32 am

      Hi I am a existing home owner but with like to sell and by a property in an estate or suitable home however I have a judgement on my name that has been paid up but not cleared and I have a low credit rating.

      I am looking for a rent to own option anyone can help?


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