April 3


What You Should Know About Rent to Own Condo

By Ana Punzalan

April 3, 2020

Recently there are many real estate properties selling condos here and there that makes it difficult for an owner to sell the unit he wants to dispose. Consequently, there are many buyers also who can’t get approval from the bank or financing institutions for any reason, which sometimes the reason why some buyers opt to go with the rent to own scheme.

Rent to own means the tenant has the option to buy the leased property from the owner within the leased period or after a period stated in the contract.

Upon entering into the rent to own scheme, both parties will agree on the monthly rental, the selling price of the unit, and the date when the unit will be purchased together with the interest rate. After both parties agree, the contract will be signed and notarized.

For rent to own, the lease amount is usually higher than the current leasing amount in the area. It is because part of this rental fee will be down payment in case the lessee decided to purchase the unit at the specified time.

The lessee has to find a bank or financing institution to pay off the remaining balance for the unit. If the lessee decided not to buy the property, then all the rental fees, including that supposedly for the down payment, will be for the lessor account. This agreement is specifically stated in the contract from the very beginning.

The selling price will be the price stated in the contract. It can’t be revised if ever there is an increase or decrease in the value of the property during the period of the lease. It is highly recommended to understand all entries in the contract before signing it fully. Both parties should agree with all clauses.

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