Buying a Home? Know How “Rent-to-Own” Works

Cavite is one of the quickly growing provinces, particularly in terms of real estate. Located just to the south of Metro Manila, the province continues to grow economically as well. Thanks to modern infrastructure, Living in Cavite won’t make you feel like you’re living in a province at all!

People searching for housing in Tanza, Cavite are bound to find themselves looking at various rent-to-own offers. In this article, we’ll take a look at how this house buying scheme works to help you decide whether it is right for you.

Rent-to-Own in the Philippines: A Brief Overview

There are a lot of real estate properties on the market today. Many developers enter local real estate markets due to some reasons, including growing economic status. Cavite, for one, is a continuously developing province, especially considering that it is home to multiple economic zones.

Tanza, Cavite is just a few kilometers away from one of the biggest economic zones in the country, the Cavite Economic Zone or Cavite Export Processing Zone. This economic hub is simply known to the locals as EPZA. Many people from all over the Philippines move to Cavite to work in the companies inside the economic zone. As a result, more people are looking for affordable housing in the area.

Furthermore, not everyone can buy a house because of the high down payment and strict loan requirements. Because of this, some opt to rent. However, renting a house can also put a dent on anyone’s budget, all while considering that you are essentially investing nothing.

This is why the rent-to-own scheme proves attractive to many home buyers. In this setup, the home buyer can apply to lease a property with the opportunity to eventually own it.

Rent-to-Own Explained

Rent-to-own is also known as lease-to-buy. In this agreement, the owner of the property essentially puts the home for lease, but the contract states that the renter can choose to purchase the home through a financing scheme. The home buyer pays for the equity or down payment, similar to how they would pay rent.

To make it simpler, the buyer rents the home while also paying part of the equity. Having a well-drafted, concise, and clear contract is crucial in ensuring that a rent-to-own buying agreement proves safe and successful.

A rent-to-own contract should include the basic rental rate plus the down payment or equity premium. It should also clearly state the lease and purchasing periods. The contract should also specify the sale price and other necessary clauses, such as insurance.

Benefits of Rent-to-Own

In a rent-to-own arrangement, both the lessor and the lessee (home buyer) benefit. The buyers can acquire a home and immediately move in while they build their credit. Buyers are also given a chance to experience living in the home first before eventually deciding to proceed with the home financing loan after the lease agreement expires. Meanwhile, developers or homeowners whose properties have been sitting on the market for a while can capitalize on their property faster.

Rent-to-Own or Not, You Should Only Transact With Reliable Real Estate Professionals

Whether you’re buying a home through a rent-to-own scheme, in-house financing, Pag-IBIG (HDMF) financing, or bank financing, you must work with reliable and licensed real estate professionals. Look for agents and brokers authorized by the developer to market and sell their properties to ensure that your investment will not go to waste.

 

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