Rent-to-own doesn’t come without its potential risks. If you enter into a lease-to-own agreement and choose not to purchase the home, you will likely lose all the money accrued toward a down payment.
While rent-to-own agreements in Canada are possible, they’re rare.
If you’re worried that home prices will continue to go up in the future, one advantage of entering a rent-to-own situation is you get to pre-determine the purchase price of a home a few years before you actually buy it. A word of warning, though. Many owners now include a clause in the contract stating that if home values rise significantly, tenants may have to pay more in the end. For this reason, some tenants may find themselves unable/unwilling to purchase the home after all.
I would personally not recommend rent-to-own situations to buyers unless it’s the very last option available to them. If this is the case, read the contract very well, better still, get a lawyer to review it before you sign the dotted line.
Charissa Realty, for moments that matter!
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