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.
Due to the amount of unsold properties in Spain coupled with falling home prices, Connells Group is to market thousands of heavily discounted Spanish properties.
Connells is partnering with Mediterranean CAM, the property branch of the Spanish savings bank CAM.
The rent to buy program will give buyers the option to rent a property for up to seven years. If the renter decides to purchase the property in the first two years, all the rent paid may be deducted from the purchase price.
In addition to the rent to buy option, buyers will have access to 90% mortgages through CAM.
According to Stuart Flavell, Connells chief executive: “We are delighted to have been chosen by Mediterranean CAM to market properties abroad. CAM Bank is the fourth-biggest savings bank in Spain and is an important financial institution with an impressive track record.
“Now is a great time to purchase a Spanish property and we believe there is an increasing number of people looking to buy in this market.
“Our customers can now purchase a property abroad, safe in the knowledge that they have the backing of a recognised and respected UK estate agent, together with guidance and advice from a well-established and successful Spanish Bank.”
To read more, click here.
In Hong Kong, a two-tiered solution to the skyrocketing home prices experienced over the few years has been proposed. The country will stop offering residency to foreigners who buy property. The second part of the proposed changes to Hong Kong’s policy is the implementation of a rent-to-buy program.
The new rent-to-buy program will offer 5,000 units for first-time property buyers. Buyers will able to rent for up to five years before eventually purchasing.
Cusson Leung, a Hong Kong-based analyst at Credit Suisse Group AG, commented that “many of the policies announced today may have only limited impact on the property market in the near term.”
“Take the rent-to-buy scheme,” said Leung, “a lot can still happen over the next few years.”
The rent-to-buy program will let first-time property owners rent a house for up to five years at a fixed rental cost. Half of the total rent paid during the rental period will be put towards a down payment to buy the home.
According to Wong Leung-sing, a research director at Centaline, Hong Kong’s biggest privately-held property broker, “These are good measures..I think this whole policy address is a move in the right direction.”
The first stage of the project is scheduled to be completed by 2014, and will include 1,000 units in the Tsing Yi district. Officials hope the new rent-to-buy initiative, coupled with a cease in residency offers to foreigners buying property will cool home prices and allow the housing market to settle. Only time will tell.
To read the original article on Bloomberg, click here.
In September, a Waterford house builder held a first-time buyers’ event that was wildly successful. The event, held at the Greenfields development on the Old Tramore Road was packed with visitors. New-home buyers were offered purchasing help and mortgage advice.
The event also marked the launch of the new rent2buy program by Frisby Homes. The rent2buy initiative helps people buy a home by allowing them to rent it for a few years and then buying it after the prearranged time-period with an accumulated deposit.
Sylvia Doyle, sales manager, said that “feedback for the rent2buy scheme was also very positive.” Doyle reported that “two buyers bought using it. They like the idea of renting, but without the ‘dead’ money. It’s also easy to use and buyers don’t need a 100 per cent mortgage.”
To read the original article in Waterford Today, click here.
The new Rent2Buy Agent Network program will offer FREE LEADS if you: List one rent to buy property a month. Your exclusive zip code will be for free!
Reserve an Exclusive Zip Code!
Rent2Buy Agent Network program will increase your experience, value and potential by being a member of our agent network program. Our Agent Network Program will allow you, the real estate agent, to be in direct contact with our buyers and sellers. You will have the opportunity to be the EXCLUSIVE AGENT in your TERRITORY. We only allow one agent per zip code, so you will not have any competition from other real estate professionals in your EXCLUSIVE area.
Once signed up, you will receive the following:
- Free buyers and sellers leads
- Access to property photos
- EXCLUSIVE TERRITORIES starting as low as $60.00 per month
- For sale by owner leads
- No contracts
For more information, visit Rent2Buy.com
Or, Conact Us at:
“Home shoppers now have an innovative new path toward a home purchase.” – Moti Kahana, founder of Rent2Buy
(WHIPPANY, N.J.) – Rent2Buy.com, the world’s eMarketplace for renting or leasing nearly anything with the option to buy, has updated Rent2Buy Real Estate with more than 2,310,380 homes.
Rent2Buy Real Estate offers a full inventory of real estate listings across the United States. The easy-to-navigate, live server includes real estate data and seller contact info in the categories of foreclosure, bank owned, homes for sale and for sale by owner
A portion of the homes listed on Rent2Buy Real Estate are eligible for Rent2Buy’s unique “try-before-you-buy” program, a powerful new financing alternative for property seekers on the path to home ownership.
“Home shoppers now have an innovative new path toward a home purchase,” says Moti Kahana, founder of Rent2Buy.
The Rent2Buy Real Estate system allows future homeowners to rent a property with the goal to apply the rental fee as a down payment toward the purchase of that home. Or they can walk away.
For Americans with credit scores below 620—nearly one-third of the population—getting an offer of even one conventional loan quote by lenders is rare, according to loan-request analysis by Zillow.com.
“Rent2Buy Real Estate gives future homeowners the opportunity to prove their creditworthiness by paying on time and then taking ownership of the property,” says Kahana. “Conversely, sellers are exposed to a larger base of potential homeowners who are motivated to buy.”
Click here to browse the new Rent2Buy Real Estate site. Check back soon, as more and more homes are added to the Rent2Buy inventory.
To read the article on RTO online, click here.
PBS NewsHour presented a story on September 28th entitled, ‘To Rent or Buy? Housing Market Leaves No Easy Answers.’ Jeffrey Brown interviewed both Jack Hough of SmartMoney magazine and Karl Case, who helped develop the Case-Shiller Home Price Index.
To listen to the story or view the full transcript, click here.
According to Karl Case, there is mixed evidence on whether home prices have hit bottom. Home prices peaked in 2005 and have now stopped falling. Case believes we’ve reached a bottom, but that it’s hard to know whether prices will continue to fall or stay up. Despite the uncertainty, Case remains optimistic. He discusses property as a consumer durable good; he states that benefit accrues to people just from owning it, basically tax-free, at about 6%.
Jack Hough, when asked how fragile things are, makes it clear that the worst of the price plunge is over. Though certain about the end of plunging house prices, he believes we could be in for a long period (potentially a 10 year period) of disappointing returns. According to Hough, prices are lagging behind the rate of inflation. People need to remember what the normal return for a single family home looks like, and think about inflation when making decisions about homeownership.
When it comes to the question of whether it’s better to buy or rent, Case and Hough differ in their opinions.
Case points out the positive aspects of buying. He cites, again, the fact that a house is a durable good. He encourages potential homeowners to think about the yield from their purchase (you live in it, rent-free, and non-taxable). He also reminds listeners that if your house falls in value, this is not necessarily a problem if you are planning to live in your home for a long time.
Hough makes a case for renting. He says that there is nothing wrong with buying a nice house, but that there is too much talk of single family housing as an investment coming from the government. He believes houses today are seen as form of consumption, but that homes were not designed for consumption. Hough advises potential homeowners to consider whether or not they can afford it; if they can’t afford it and don’t anticipate what actually goes into it, they should rent.
The option to rent to buy a home is not mentioned by either contributor to the PBS segment. However, it is clear that there is no consensus as to whether renting or buying is the best option, taking into consideration the state of the current economy. Rent to buy is an option that potential homeowners should seriously consider when deciding whether renting or buying is the best fit for them in their current financial circumstances.
Explore Rent2Buy.com for comprehensive real estate listings and the option to rent to buy your next home.