Rent to own homes Lagos Nigeria - Rent to own homes or rent to own houses provide an opportunity for tenants to invest in real estate in Lagos Nigeria.
A rent to own situation occurs when a tenant or potential tenant is given the option of becoming the property owner after a certain period of time.
Usually, the lease to own agreement for rent to own houses stipulates . .
With regard to rent to own homes or rent to own houses, the monthly payment towards owning the property may be equal to the current rental price or higher than it depending on . . .
1. The size of the initial upfront payment or bulk payment made towards purchasing the property and
2. The duration to make the balance payment
Let me illustrate the rent to own homes situation with an example to drive the point home.
Suppose you live in a rented bungalow and somehow discover that the landlord wants to sell. You approach the landlord and indicate your interest to buy the property.
Suppose too that the landlord wishes to sell the property for 8 million Naira. Unfortunately, you do not have that kind of money at the moment. You could propose to the landlord a lease to own relationship backed by a lease to own agreement drawn up by a qualified real estate attorney.
Suppose the landlord accepts your proposal. The property now acquires the status of a rent to own home.
However, before that change of status occurs, you will need to reach some basic agreement with the landlord.
1. You will have to agree what the upfront bulk payment will be
The landlord is selling for 8 million. Have you agreed to buy at that price? If no, how much are you willing to pay?
Suppose you negotiate the asking price with the landlord and he finally accepts your offer of 7 million Naira. Great.
Now you must agree how much he wants you to pay upfront.
Does he want 4 million Naira of the 7 million naira right away? Or is it 5 million Naira? 6 million Naira?
Suppose he finally agrees to collect 5 million Naira upfront payment. That is another milestone achievement.
Now it is time to agree on step 2.
2. What is the payment period for the balance payment on the selling price of the house?
This decision is critical because it determines two things:
a) Your monthly financial commitment in terms of how much you pay to offset the 2 million Naira balance payment on the property purchase and
b) How soon you complete the lease to own transaction, collect the complete documents from the landlord and assume full ownership of the property
Suppose you agree to pay the balance over 12 months. Your monthly payment to the landlord will be 166,666 Naira per month.
If you go at that rate, in just one year, you will move from rent to own, from tenant to landlord.
There are obviously benefits to using the rent to own house option.
First, you already live in the neighbourhood and know all about it. For you to consider buying the property you have been living in as a tenant, it means you have enjoyed living in the neighbourhood and want to consolidate your stay there.
Secondly, the rent to own houses option allows you to buy a house by spreading the payment over a period of time. That way, it's easier on your pocket.
Why would a landlord want to sell his property this way? Why not demand outright payment at once in-full?
It certainly pays the property owner to sell the property and get his money at once in full. In fact, that is what most landlords demand.
However, many properties stay in the market for 6-12 months before they are finally purchased. And if the property owner urgently needs money to fix a problem, his situation is compounded.
Therefore, depending on the circumstances of the landlord, the lease to own option associated with rent to own houses is profitable.
Rent to own homes is a win-win situation for the landlord and the tenant aspiring to be a landlord. So make the most of it.
Grab any lease to own opportunity. Don't let this unique opportunity to invest in a property you love pass you by.