It’s not always easy to get a mortgage for a home, so thankfully there’s another option. Rent-to-own housing involves renting a home for a specified amount of time with the option to buy it before the lease expires. Rent-to-own houses in Kelowna, like in other areas, can therefore be an especially great way for people who have low credit scores or don’t have quite enough for a down payment.
We break down some of the most important info to know before you decide to purchase a home this way.
Rent-to-Own Houses in Kelowna: The Type of Contracts for Them
Typically, rent-to-own homes are signed with two different types of contracts: lease-option or lease-purchase.
Lease-Option
The most flexible choice out of the 2, lease-option contracts gives you the ability, but not the obligation, to purchase the home when the lease is up. If you choose not to buy the home at the end of your lease, then the offer to buy it simply expires. Out of the two options, this is the most favourable as there isn’t any legal requirement to buy the home. Usually, this isn’t the case with lease-purchase contracts.
Lease-Purchase
Lease-purchase contracts work similarly to lease-option ones, but instead of getting the option to buy the home at the end of the lease, you are usually obligated to buy it. If you’re financially secure and are invested in the home and area, this may be a better option, but make sure to look over the contract carefully as there may be a requirement to buy the home at the end of the rental period whether you are financially stable or not.
Rent to own housing is typically best for people who aren’t quite ready or able to buy a home, but will be able to do so in the near future. Oftentimes, a portion, or even the entirety in some cases, of your rent will go towards the purchase of the home—helping you build equity until you’re able to fully buy it. While not an option that’s great for every potential homeowner, it’s an excellent choice for those who aren’t quite financially ready.