"Rent to buy" financing scheme

[Vladimir]

Hello everybody,


Could you let me know your opinions, please ?


I have heard about this.

There is a possibilty, when buying a property, to choose some "rent to buy scheme".

It means, first renting a property few years, paying the rent and some part of the rental paid is also used for buying the property.

I have found some examples on other websites, there was something as:

The seller and the buyer agree on the price. Renting the apartment for first 5 years, and after the 5 years, paying out the rest of the apartment price ...


Is that kind of buying normal (usual) in Cyprus ?

If so - is it used only by person to person selling/buying, or do also developers, or estate agencies offer this possibility ?

I understand, that this can suit to people, who does not have the whole amonut yet, to pay the property at once and are not able (or do not want) to get a mortgage now, but in few years later on.

Our idea is, we would like to buy an apartment. But prior to buy it, first we would like to live in that area we choosed (let's say, 1 year rental, to find out, if everything is allright for us there ...).

If we do not like the place, we can move anywhere else, loosing the rental fees only, - that must be paid everywhere, of course, so no problem here ...

We have heared, that some owners (in Cyprus) offer such kind of selling ...

But it is a little bit different from that option mentioned as I have read somewhere (5 years renting and then you must buy it).

Would you recommend (for sure, it depends on the exact conditions agreed) this kind of buying ?

Thanks for your advices, in advance.

Regards,

Vladimir

[Nigel Howarth]

Hello Vladimir and welcome to the forum.

You can read about the 'rent to buy' scheme that I have seen at http://www.foxrealty.com.cy/documents/e ... y%20gm.doc - I believe this is a relatively new product in Cyprus.

As I have not seen any other companies offering rent to buy, I suspect 'Fox' may be the only company.

If you do decide to go ahead, please be sure to use an independent lawyer to check that everything is OK - you can find a list of English-speaking lawyers on the website of the British High Commission in Nicosia at http://ukincyprus.fco.gov.uk/en/help-fo ... al-lawyers.

On the general subject of renting, I always advise people who are thinking of living in Cyprus permanently to rent before they buy - preferably for a year. This will give them time to explore the island, talk to others about their experiences of living here, see how much it will cost them to live, find somewhere that suits them - and find out if they will be happy living here permanently.

Unfortunately some people find out too late that Cyprus is not for them - family ties or too great, they cannot settle, they chose the wrong area to live, etc.

Renting helps to avoid making a decision that you may later regret.

Regards,

[Vladimir]

Hello Nigel,


Thank you very much for your reply.


Something similar (or same) I have found here:

http://www.propertyincyprus.com/content ... buy-option


Thanks.


Have a nice day (s) !


Regards,

Vladimir

[kade12]

I personally have an apartment for sale and consider this could be a good idea.
Am i over simplyfying the idea that i would be willing to rent out the apartment at the going rate for say one or two years and the rentor after the agreed period would buy the property if they want at a price agreed on at the start of the rental period.If they don,t want to buy the lease simply ends.The rent paid would be knocked off the price off the property if they want to buy..Mmm,to my piont of view everybody wins.Over to you Nigel...Terry Liversidge

[Pantheman]

The idea is ok, but the interpretation of some for rent-to-buy is not the same.

1. Some think they can rent the property for 30 plus years just paying rent, then the property becomes theres at the end of the term.

2. Some will rent for a year or so (I think 1 year is enough to decide) and then buy or not. The rental amount being deducted if bought.

3. use the excuse for a rent to buy to get into a property not normally available for renting, and then have no intention to buy.

A number of developers offer this sort of scheme, especially in the current climate where sales are down.

Good luck.

Pan

[Nigel Howarth]

Hi Terry,

In theory, this might work - but you have to be sure the contract is watertight as you could end up with the people not paying rent and refusing to move out after the rental period has ended. This would involve you in costly legal action to remove them.

Regards,

[Pantheman]

Hi Terry,

In theory, this might work - but you have to be sure the contract is watertight as you could end up with the people not paying rent and refusing to move out after the rental period has ended. This would involve you in costly legal action to remove them.

Regards,

Same could be said for any rental property Nigel.

[Nigel Howarth]

Same could be said for any rental property Nigel.

That's the problem - it has to be a sale agreement rather than a rental agreement - otherwise you could find it very difficult to get them out.

Cheers,

[kade12]

Surely Nigel(and i think you may be playing the devils advocat)that at the end of the rental period should the lessee not want to buy at the agreed price then they are out as it would stipulate in the agreement.Again i think everybody wins. Terry Liversidge

[Nigel Howarth]

Hi Terry

I'm not playing devils advocate, but those wishing to go down this route need to be very careful with their contract. It is extremely difficult to get someone out of a rented property even if they do not pay the rent.

A chap I know rented his property long term and his tenants haven't paid rent for over a year - and he is still taking them through the courts.

Regards,