Has anybody out there had experiences or know anything about rent to buy properties?My wife and i with limited funds would at some stage like to move from Wellington to the country and perhaps this is a way of getting into our own little piece of paradise.Your thoughts please.

Rent to buy options in regards to property, need very careful evaluation, and you should engage an independent lawyer, to ensure that you do not fall into any legal traps, there have been many instances over the years, Some featuring on "Fair Go" where family's have lost their entire savings, and also end up in very serous debt, and no property. I would suggest that you, visit http://www.comcom.govt.nz and the Housing Corporation websites
http://www.hnzc.co.nz/hnzc/web/rent-buy-or-own/guaranteed-rent-through-home-leasing/guaranteed-rent-through-home-leasing_home.htm

There are no free meals when it come to home ownership. Rent to buy can be quite successful. You require a willing buyer and a willing seller. A sale and purchase agreement is drawn up with the final payment due in say four years. More on that below.The seller would expect a reasonable deposit and then the seller literally acts as a bank. The rent is set at higher than normal rent. This rent covers mortgage interest, rates, house insurance, income protection,plus repairs and maintenance. After all deductions, the surplus goes towards reducing the mortgage. Hopefully , when final payment is due, the value of the property will have increased(not gauranteed). At that point the purchaser should be in a position to obtain a bank loan. If you default on rent, the property would be subject to a mortgagee sale and that is where a loss can be made.
Buying a house requires a very big committment and should not be done without being certain that all payments can be made

Post deleted at 27 Apr 2010 3:41pm by Jim M

Post deleted at 03 May 2010 10:12am by GrownUps Administrator