June 18, 2024


Mad about real estate

What is Rent to Buy Housing Scheme?

Many sellers in today’s world are offering rent to buy housing schemes. New ways are developing day by day to sell as many homes as possible. These kinds of schemes work like hire and purchase schemes. The seller allows the tenant to move in their dream homes and the tenant starts paying the rent for the same home in which he want to live. So the tenant gets his dream home by the use of rent to buy housing schemes. The scheme is like try before you want to buy a certain home. It gives an idea of the house and the ambience it provides.

It is like an agreement of lease and the individual has to fulfil all the necessary rules and regulations. The buying time can vary from three months to ten years. The price of the property is fixed when the agreement is signed and when that money is paid then the house will be handed over to the tenant. The whole scenario depends on the market. If the house price rises then it can become difficult to pay that price and everything depends on sheer luck. Most the times the prices of the house are steady and constant but sometimes they can vary according to many different scenarios.

Many people look at the houses as an investment scheme. They buy the houses through the rent to buy housing schemes. But this can prove as a potential risk because house prices might go down in the future. Home ownership is good but it comes with a load of responsibilities too. House is a shelter which provides a place to hide the individual from the outside world. It is not an investment at all. If a person misses the mortgage payment then they are in a condition to lose the house. However, if the finances are good then this situation can be averted. The time when all the instalments are paid then the real cost of the house becomes half that of the original cost. Renting is not like wasting the money but it is like investing the money in a good manner. A renter does not pay interest to the concerned bank and in return the interest is paid to the owner of the house.

Thus, the rent to buy housing scheme becomes an important factor if the concern is to try a house before buying it. It provides full ease of access before going to buy a house and also provides a prototype for a real ownership experience! The rent to buy housing technique is not for a long term use and the day will come when the full payment has to be paid and the house will be given to the tenant. The tenant will become the landlord after all the formalities.