RENTING TO BUY.

[cejay]

Hi friends!

Please I would like to know more about this renting to buy of a business in the property industry.

Can some one please let me know how this works and the advantages and disadvantages of it.

Please let me know the details as it will enable me to plan ahead of time if that works in a better way.

[cejay]

I am in Cape Town right now and am trying a possibility of establishing a backpakers accommodation for a little business. I look forward to your advise.

[cejay]

Please gimme idea about renting to buy, a discussion on thjis will lighten us up.

[Dave A]

The devil is always in the details...

You haven't given any.

[wynn]

There is a rent to buy option in property transactions.
Origanaly it worked with the seller and buyer agreeing on a price and the buyer agreeing to pay Xamount a month, usually a higher figure than ordinary rent escalating every year.
After an agreed period, say five years the owner would transfer the property into the buyers name with the condition that a bond be in place for the balance of the purchase price, so that upon transfer the seller recieved the balance and the buyer continued paying off a bond instead of rent.

The advantage, you secure the price of the property and don't need to raise a bond.

The big disadvantage is that if in say year four you have a financial wobble and fail to make the rental payment, the contract is automatically voided and you loose everything that you paid already.

[cejay]

Thanks guys. Dave, please elaborate...

[Dave A]

I was mystified as to exactly what you were looking to "rent to buy". But Wynn's post seems to have solved that, thanks.