Canada is buying into the rent-to-own concept: Four years ago, when Christian Fracchia heard about a rent-to-own opportunity in Port Moody, B.C, he saw a way to realize his dream of first-time home ownership, so for 30 units he put his name in a lottery.
Almost 10% of the 358 units in the development are still under construction. 50 Electronic Avenue was sold as rent-to-own, meaning the buyers pay a fixed rent for 2 years, which is then converted into equity.
A 28-year-old software developer, Fracchia has an appointment near the SkyTrain and a seaside park. This is all for $ 10,000 down and $1,000 per month. In 2 years the payment went downwards to $470,000. It’s like free rent for 2 years.
Fracchia said that the money I get to keep as long as through with the sale. For new home buyers, rent-to-own is a unique path to homeownership that delays one of the biggest hurdles.
Advocates say people who cannot qualify for a traditional mortgage to work toward ownership this model of home financing allows people with limited or damaged credit.
Rent-to-own is untested and has some pitfalls and risks:
It includes the maintenance cost or in some cases, the potential to lose the down payment by chance if the renter fails to meet the terms. Canada is funding more projects like this.
By creating a rent-to-own housing program as part of $2 billion in the next 10 years spending to double home building. Funding in previous budgets is aimed to create 17,000 new homes in different parts of the country.
It increases more rapid housing for the homeless or who are at the peak of becoming homeless. It also includes affordable and market-rate housing projects.
$200 million rent-to-own fund
Around $200 million is earmarked for a new rent-to-own program. This is managed by Canada Mortgage and Housing Corp. It will help in encouraging developers and builders to create more opportunities for first-time homebuyers, said Prime Minister Justin Trudeau.
It is increasingly difficult for a lot of renters to save and buy a house. This program will help housing providers to help families pay rent or buy their own house.
On August 30, applicants to the5-year affordable housing innovation fund and its new rent-to-own stream opened to municipalities developers, builders, community, housing org, and non-profit organizations.
Around 500 people applied back in 2018 when the Panatch group offered rent-to-own units in Port Moody. Kush Panatch of Richmond, a developer, said he would never offer rent-to-own before.
After reviewing essays including one from Fracchia, who wanted to stay in the community he loved so much. Rent-to-own is not always the perfect path to homeownership ownership, Panatch cautions. He discovered unforeseen costs which include the cost of GST.
Complex legalities to navigate, and rising interest rates make programs expensive. Rent-to-own is an agreement between renters and property owners or investors to buy a home at a set price. Rachel Oliver runs a private rent-to-own program.
She has helped 600 Ontario families. She said her company usually requires $20,000. She also said that she would sell the property in increments. Tenants are responsible for paying for maintenance and upgrading of homes. Oliver said that rent-to-owners need to be committed.
You may know better ideas about BEST BUSINESS IDEAS IN NOVA SCOTIA.