– I would like a log home on an acreage.

– Do you do mobile homes?

– I’m not fussy, I just want to get out of paying someone else’s mortgage.

– I’m a handyman; I’d like a fixer upper.

– I just want bare land to build a house on.

– Would it be possible to have a house with a suite? Who gets the rent?

– I’d consider a townhouse if I can’t get a single-family home.

Many people inquire about the kinds of properties on which we would consider a rent 2 own.

While each property is unique and must be evaluated on its own merits, there are certainly some that are preferable to others. And there are certain general criteria we follow in making those judgement calls.

Now, first let me reiterate that when you enroll in our program, you get to choose your future home. We don’t have any inventory of available homes. The only ones we own are the ones we have purchased for our clients. You get to go shopping with our realtor for your dream home, from those that are available on the market.

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That said, though, we do reserve the final say. For us, the question is not whether we like the home, or would want to live in it ourselves. The bottom line is, Is it a good investment for us and our investors? If not, I do get a veto on the selection of the property.

So what makes a good property that we can approve?

Well, in short, we ask, “If this deal goes sideways (which we hope will never happen, but which we must consider as a possibility) and we get stuck with the house at the end, can we do something profitable with it?” Sell it without a loss? Find another rent 2 own client who also adores this property? Keep it as a profitable long-term rental?

For us, the most ideal properties are “BC boxes” in the heart of the city (but not in a sketchy neighbourhood). And we absolutely love homes with suites; they provide the best chance of a profitable backup plan. And, yes, during the rent 2 own period, the client gets to use the rent from the secondary suite to help pay for their own rent. So it’s really a win-win for everyone.

You can imagine that we’re a lot more hesitant about rural properties and unique homes. They have a much more limited set of would-be buyers and so are harder to deal with if the deal doesn’t succeed. But, in the Fraser Valley, there’s “rural” and then there’s “really rural”. Places like Greendale, Silverdale and Arnold might be considered rural, but are still attractive markets for many buyers.

Regarding fixer-uppers, we’re happy if our clients want to improve a property once they’re in it. But we are also hesitant for them to spend too much money on renos, as that may impede their ability to keep up with the rent. And, we want to make sure that all renos are up to standards, meet the code and, if necessary, have proper permits. And, we want to make sure that the client is, in fact, competent. So, generally, we will consider a property needing a little love, but will not approve one needing a resurrection.

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Then, there are those mobile homes. We cannot approve mobile homes in mobile home parks (that pay pad rent), as their ownership does not include the land on which they’re sitting. Hence, we cannot get a traditional mortgage for the home, nor will the client in the end. But we can consider those that are on their own titled property. In those cases, it depends a lot on the mobile itself, its condition and age.

We cannot normally consider bare land without a home as we cannot usually get a high ratio mortgage on such property. We will likely need 25 to 50% down on it. And it depends, too, whether the land is already serviced or not.

What about strata properties: condos and townhouses? The answer is, Yes, we can consider them. But we are much more limited with them because: 1) it is harder to get a good buy because they don’t usually appreciate in value as much as freehold homes; 2) they must allow rentals (which many don’t) because during the term of the rent 2 own the property is treated as a rental; 3) we must add the strata fee to the rent, which makes the rent a little steep for the clients.

So, there you have it. Certainly, we invite your inquiries about any specific properties. But these are the general guidelines for evaluating the potential of a property as a rent 2 own.

Quote of the Week

Don’t walk in front of me… I may not follow. Don’t walk behind me… I may not lead. Walk beside me… just be my friendAlbert Camus