Frequently Asked Questions
What is Rent-to-Own?
Rent-to-Own is a specialised tenancy agreement allowing the tenant to rent a property for a fixed length of time with the option to buy it outright at the end of the rental period.
How does it work?
It is very straightforward: PropertyPact have brokered deals with a panel of developers nationwide. You are allowed to move in as a rent-paying tenant. You’ll then have the option to buy the property outright after a fixed period of time, typically one to three years, at the market price, receiving a substantial Rental Pot, which takes form as your deposit. You’re under no obligation to buy at the end of the rental period. However, if you decide not to buy at time of fixed rental expires, your Rental Pot is not refundable.
What is a Rental Pot?
The Rental Pot collects your monthly rental payments and transforms them into your deposit at time of purchase. This can be anything up to 100% of the Pot depending on the market conditions at the time of purchase.
Do I pay a deposit?
No, you will be asked to pay the traditional ‘one month’s rental up front with a refundable 6 week damage deposit’ which is normal rental procedure. At the time of purchase you will pay normal brokerage and legal fees.
What are the benefits of purchasing property this way?
For many first time buyers, Rent-to-Own can offer a much better deal than a conventional purchase. You don’t need to take out a mortgage straight away, giving you time for your financial position to improve so you can afford to buy at the end of the rental period. While that happens, you get to live in a property you can think of as your own home, knowing your rental payments are forming your Rental Pot which will form part or all of your deposit at time of fixed tenancy expiry. You’re on the property ladder knowing that you are contributing to your own future property ownership.
Are there any downsides?
With anything related to property you are committing to an agreement for the short to medium term. You’ll be living in the same place for the agreed rental period, which means that you have to think carefully about your future plans before you sign up.
Will the rent be higher than a normal rental?
The rent you pay with a Rent-to-Own is treated exactly the same as a regular rental, Propertypact take benchmark prices in the area for like properties, ensuring that you are getting the best deal possible.
Is this scheme widely available?
There are different guises of this scheme available on the market, however, they ask for down payments, non-returnable deposits and are relatively fee laden. We are direct from the start of the arrangement, there are no hidden costs and you know where you stand financially throughout the arrangement.
What happens if by the purchase date the property has gone down in value?
If the property has fallen in value over the fixed period, the Rental Pot will diminish in value, in order to cover any losses suffered by the vendor at that time. If the property price remains static, or increases in value you will receive 100% of your Rental Pot.
Who is responsible for any repairs to the property?
It is the Landlord’s responsibility to cover any repairs to the property that are not of the tenant’s doing. However the cost of any repairs caused by tenants will be deducted from their damage deposit, which is normal rental procedure.
How do I sign up?
Register to become a PropertyPact member. Contact us through the site and we can start the ball rolling. If you don’t see a property that suits your requirements, let us know what you need and we’ll endeavour to broker a deal for you. You will be required to fulfil the traditional rental requirements such as credit references and suitability checks. We will guide and advise you every step of the way.
Spread the word about Property Pact and co-buying tell a friend about us.
Register with Property Pact today and take the first step towards the reality of owning your own home.
