November 12th, 2012
There’s a new fad in Winnipeg and it’s not a Korean dance hit. It’s Rent-To-Own and both Landlords and Tenants need to know what they are getting into.
What’s the Fad?
More and more Winnipeggers who have damaged credit and are force to rent are turning to ‘rent-to-own’ housing.
What’s the Down Side?
The down-side is there are rules for ‘rent-to-own’ which will leave some tenants on the outside looking in.
Why Don’t People Want to Continue To Rent?
Most renters would prefer to own their own home. This way they can avoid issues with other tenants.
And?
They can also avoid issues with their landlord.
How Does Rent-To-Own Work?
There is a large group of companies in Winnipeg which offer this package.
Here’s how it works.
The landlord rents out to the tenants. The tenants pay a larger than normal rent. This extra rent is then saved to eventually become the ‘down-payment’ to eventually buy the house from the landlord.
Who Are Their Target Markets?
Rent-to-own houses target tenants who have damaged credit or don’t have enough money to put down a down-payment to purchase a home.
The goal is to help people who couldn’t afford or qualify to won a home an alternative path to do so.
What Happens If You Break the Rent-To-Own Contract?
If the tenants break their leases/contracted they get evicted and lose whatever down-payment they have paid up to that point.
Any Example of This?
One rent-to-own tenan explains how he signed a contract for three years to own a house. He eventually found he couldn’t afford the rent. He lost his down-payment and was evicted.
What Does the Landlord Say?
This tenant’s former landlord said he offered financial counseling to him and only wanted to help. He has to follow the rules otherwise he would be in financial trouble and need help of his own.
Will The Demand For Rent-To-Own Continue?
With vacancy rates low in Winnipeg, as well as a shortage of affordable housing, the demand for rent-to-own homes will continue growing, he added.
And this is likely to spread as other provinces such as Alberta also have a shortage of rental houses.
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