This concept is not very new in the market, but it has gained much popularity since the economic crash and the credit crunch. The lease is something like a normal rental agreement and the tenant agrees to pay the monthly rent as long as the rental term exists and then the tenant can exercise the power to buy the house. The rent paid is usually deducted from the purchase amount of the house. When the renter is considering the rent to own houses option, the rent is a little higher than usual but works as a way to create a housing deposit with the landlord in case of eventual purchase.
People who have bad credit and do not have enough savings have difficulty securing a house financing through bank mortgage; thus, it makes it quite impossible for them to purchase their dream home. However, this is only the thing of the past because now it is made possible by rent-to-own deals. Practically anybody, even those who are newly graduates and those who have poor or average credit standing can now avoid the common pitfalls of renting a house for life. What do I mean with this statement? I will try to explain the effects of having to rent as opposed to the many benefits of a rent-to-own program.
Edward has just graduated from college. He decided to move to Ottawa from his hometown to explore the possibility of employment. And so on his first year, he rented a condominium where he can stay together with two of his male classmates. At first it was okay because the three of them were sharing in the rental fee. But when one of them moved out because he decided to explore his options in another location, Edward felt the financial crunch. Although he was already earning because he got employed after just a few months of his transfer, filling in for the rent of the one that moved out was a bit of a dent on his cash flow. This was when he learned about the rent-to-own houses Ottawa program.
Rent to own homes give opportunities to people with a poor credit history to be able to buy a house. This is because the tenant or the potential buyer need not make a hefty down payment in order to buy the house; he may just have to rent the house for a fixed period and then he will have the option to buy the house. This way he may have enough time to collect some money to purchase the house.