Helping Frustrated Renters Become HAPPY Homeowners
February  12, 2018
                            No. 234
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The Main Reasons People Apply To Rent 2 Own
With well over 3000 applications having arrived in my In box since I started our Rent 2 Own program eight years ago, I think I’ve heard all the reasons why people want to get into their own home. But there are a few that dominate.
1. I’m tired of paying someone else’s mortgage.

This is probably the biggest one. And for good reason. The fastest and best way to financial security is to build up equity in your home. When you’re a renter, you start from scratch every month again. You got no further ahead last month by paying your rent.

Now, if the title was in your name and you paid down a little of the outstanding balance last month when you made that payment, even if it was only a minuscule portion, you are slightly ahead. But the effect spirals, and pretty soon you’re paying a substantial amount of the balance each month, building your equity and thus, your financial well-being. Add to that the appreciation that may be occurring and you are soon in a much stronger net worth situation, even if not in a better cash-flow one. Paying your own mortgage gets you ahead financially.

But, you also need to be aware of two cautions. First, your payment will not likely go down. Hard as it may be to accept, landlords make almost nothing in rent; they may hardly be covering their costs, so you will still be paying just as much each month when you pay your own mortgage and associated costs (taxes, insurance, etc.) Second, when you enter a rent 2 own program, you’re still paying rent during the term of the program. There is no equity gain until you exit the program and get title to the property. However, there is the “light at the end of the tunnel” that is not there when you are simply renting.

2. I’m tired of  uncertainty, and having to move all the time.

Or, a variation of that: “My landlord has just put my house on the market and I have to move at the end of the month.” I get that. I hate moving, too. And decent rentals are hard to find. It’s a frustration to have to go through the renting process, and it’s no fun doing it repeatedly.

That frustration is compounded if you have kids in school. They’re settled and you don’t want to have to move them to a new school—which, of course, further limits your rental options.

Getting your own home, where you make the calls, allows you the security you don’t have when renting. Maybe there will come a time that you’ll want to move, too. But the call is then yours. You are now the master of your fate. And that appeals to most people.

3. I have pets and can’t find a rental that will allow pets

This is a pretty big one, too. Landlords don’t have to allow pets in their rental units—and why would they if the market is strong enough that they can get tenants without pets. Put yourself in their shoes: if you could rent to someone with pets or someone without, which would you choose?

Rent 2 own is an excellent solution for people in this predicament because, as a rent 2 own provider, we don’t mind pets. We’re confident that you will become the homeowner at the end of the term, so it’s your call. (If we don’t think you’ll succeed at the end, we won’t accept you into the program in the first place.)

4. I am self-employed, and I’m not allowed to run a business in my rental unit.

This one doesn’t come up as often, but we have helped people in this situation.

Again, we don’t care if you’re running a business from your rent 2 own home because we’re confident that you’ll be around for the term and will close at the end. In fact, people in this situation are especially good prospects for our program because their business gives added incentive for them to complete the program and succeed in the end.

There are a few other reasons we’ve heard, as well, but these are the main ones. What’s your reason for considering rent 2 own?

Of course, in all of these situations, you’re better off if you can buy outright than if you enter a rent 2 own program for a few years.  However, if you can’t get a mortgage now, but there is strong expectation that you can get to mortgageable status within the framework of the program—usually 2 or 3 years—then rent 2 own may be the perfect solution for you.

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Award-winning Fraser Valley Rent 2 Own is a founding member of the Canadian Association of Rent to Own Professionals (www.CAROP.ca)
Quote of the Week:It isn’t what you have or who you are or where you are or what you are doing that makes you happy or unhappy. It is what you think about it. – Dale Carnegie
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