The Canadian Real Estate Investor Podcast
How Rent-to-Own Real Estate Works
Published December 10, 2024 · 2298
Topics: Rentals
Show Notes
We explore the concept of rent-to-own real estate in Canada, comparing it to car leasing and explaining how it bridges the gap between renting and owning property.
- Rent-to-own offers two main agreement types: a lease option agreement where tenants have the choice to buy, and a lease purchase agreement where they're obligated to buy at the end of the term
- The typical structure includes an upfront option fee (1-5% of home price), monthly rent payments with a portion going toward the future purchase, and a predetermined purchase price
- This strategy is particularly beneficial for people who can't qualify for traditional mortgages due to insufficient down payment, low credit scores, or non-traditional income sources
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