# Rent to Buy??



## RachelH (Jul 14, 2008)

Hi all, Im just wondering if anybody has purchased on a Rent to Buy scheme?/ Ive read from other sites about this.Ive seen a few sites offering this scheme but property was well over priced, then other sites saying they should be lower .....I have been looking to buy property but dont want to get into a 20yr mortgage... so the rent to buy does appeal to me...rent for 3-5 yrs then pay off the remainder after. Just thought Id ask for any advice or opinions


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## kaz101 (Nov 29, 2007)

Hi Rachel, 

I do rent to buy programmes in Australia. These are usually (but not always) lease options - you rent the property with the option to buy it later on. 

The price is usually higher because 
- you're not putting up a lot of money to get started whereas usually a 20% deposit is required (these figures may be different in Spain to Australia)
- you're settling on a future price since you're not buying the property now but in a few years time (when prices should have gone up). 

The programme we do is to help people get started on the property ladder so they buy through us, build up a good record and a deposit and then they get a mortgage in a few years. 

You want to know 
- when you are making a payment does that consist of the rental and the payment that goes towards owning the property?
- how much of the payment that goes towards the deposit (if you decide to buy)?
- if you are paying a lump sum upfront does that go towards the deposit (if you decide to buy the house)?

The other way of doing rent to buy is called term contracts or instalments in Australia where you actually buy a house by instalments and it's yours from day one. I don't know if this is done in Spain. 

I hope that helps a bit,
Karen


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## Alcalaina (Aug 6, 2010)

RachelH said:


> Hi all, Im just wondering if anybody has purchased on a Rent to Buy scheme?/ Ive read from other sites about this.Ive seen a few sites offering this scheme but property was well over priced, then other sites saying they should be lower .....I have been looking to buy property but dont want to get into a 20yr mortgage... so the rent to buy does appeal to me...rent for 3-5 yrs then pay off the remainder after. Just thought Id ask for any advice or opinions


It´s very common in Spain, at least in the public sector. Local authorities build new or restore old houses then offer them to low income families to either rent, purchase or rent-to-buy. They are heavily discounted but if the buyer sells the property before a certain time has elapsed (usually 20 years) they have to pay back the difference.

In the private sector, property developers are offering rent to buy deals in an attempt to shift unsold dwellings. 
Rent2buy - Rent to buy properties, an option to buy property in Spain combined with a rental agreement, try before you buy

My immediate concern would be that since house prices are still falling, you might be contracting to pay a price which might be more than the house is worth when your rental period is up.


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