Discussions

I'm looking at buying a house, and wondering my options. I've heard about renting to own, can someone shed some light on how exactly that works? And how do I find someone who is looking to rent out their house to my family and I for us to own? Would be buying a house without renting to own be a better option? Pros and cons??? Thanks everyone

Is that it's hard to get the down payment needed to get a loan for a house and is why people may go for rent to own. However there are always those cautionary tails of renting to own where after x amount of years the owners of the house decide they don't want to go through with it. It's all about how the contract is written out. So I would more suggest talking to a lawyer or a realtor for the best answers.

It can be a good idea in some situations but it needs to be done carefully. It should always be done with two separate contracts, one for a straight rental contract and a second contract for an option-to-purchase. The payments for rent and the payments towards the purchase need to be kept separate as well. CMHC will want a paper-trail for the eventual purchase.

Finding an owner willing to do that. Most people need their equity out of their house to purchase another one. So they need to sell not rent. If the owner is renting the house they have very little incentive for the renter to be buying down the cost of the home while it's being rented. Markets change usually they go up. The owner is usually better off renting until he wants to sell and then sell it.

What we ran into with rent to own came when we submitted everything to GenWorth to do the mortgage.  
 
They decide what they think the average rental price is for your area, size of home, etc, and then only take anything paid above that as consideration for your down payment.  
 
So....if they figure the average rental for your place would be $1000 a month and you pay $1200 a month as your rent to own, then only $200 will be considered.

For further information speak to your lawyer you will need one anyway for the purchase of a house. I don't see a realtor as a good source for unbiased or correct information as they don't generaly deal with rent to own house sales.