Whether you are a landlord or tenant, you’ve probably wondered about rent-to-own agreements at some point.

If you live in Prince George, BC, Realtor® Keven Braet says rent to own properties are difficult to find for one simple reason: most landlords would never want to offer them.

 

 

Who Benefits?

In most situations, rent to own properties are only advantageous to tenants, which is why most landlords simply won’t enter into this type of agreement.

When landlords do offer a rent to own option, it’s usually because they believe they have limited options themselves and are misinformed about rent to own properties.

Keven says it’s the landlords who take on all the risk in rent to own situations.

“Under BC law, you can only attribute a maximum of 25% of the rent towards a down payment each month. Let’s say the rent on the property is $1000 a month. $250 of that can legally go towards the down payment. If the rent to own collapses, the tenant gets their down payment back, which means the landlord was only getting $750 a month for rent, and the tenant can walk away from their commitment to buy the home.”

Fluctuations in the market will also affect the value of the home before it is finally sold.

As Keven explains, “Let’s say the house is worth $200,000 at the time the rent to own agreement is signed, and the tenant agrees to purchase the house for $200,000 one year from now. When that year is up, if the house value has gone down, the tenant can walk away with their down payment and find a better deal. The landlord now has to find a new buyer and will get less for the property than if they had sold it a year ago. However, if the market goes up by $10,000 during that year, the house is now worth $210,000, but the tenant that reaps all the benefits of the increase in the house value because they will be buying at the agreed price of $200,000.”

Tenants should be aware that there is usually a higher cost involved in purchasing through a rent to own agreement. To compensate for the risks involved, most landlords offering a rent to own option will charge a premium for the home.

 

 

A Better Way

Landlords don’t have to put themselves at risk, even if they do want to offer their tenants an option to buy the home.

Keven advises setting up two completely separate contracts: a standard agreement to rent the home and a standard agreement for the sale of the home. The agreement for sale will be slightly different from a standard sale contract in that the closing date will be a year or two down the road instead of a few weeks away.

“This sale agreement is a binding contract that offers protection for the landlord while still giving tenants the opportunity to save for a down payment while they rent. The deposit will increase each month and will be non-refundable.”

 

 

Rent To Own Agreements Aren’t Worth The Risk

While they may work out well for some tenants, Keven says rent to own agreements just aren’t worth the risk for landlords.

“I would never use them or recommend them for my clients. Most landlords that sign a rent to own agreement are misinformed and don’t understand that there’s a better way of doing it.”

 

 

If you need advice about selling a property in Prince George, BC or surrounding areas, get in touch with our expert Realtors® at Team Powerhouse Realty.

Cam McLeod

Pursuing a successful real estate career in beautiful Prince George has been an amazing opportunity for me. I pride myself on high standards, professionally and ethically, and I work hard to get my clients the results they are looking for. Home renovation projects are a passion of mine, and I enjoy discussing how buyers can adapt properties to suit their needs.

I like to tackle projects that are both creative and technical, and I’m often tinkering with Hot Rods and motorbikes. I also host a local radio show, which has been a great way to express myself. I look forward to the future and to working with you to achieve your real estate goals.

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Office: 250.563.1000
Mobile: 250.981.6774
Fax: 250.563.1005

Chris Lodge

Hi, my name is Chris Lodge and I am in my sixth year of selling Real Estate in Prince George and Fort St. James. I have always loved houses, whether it be fluffing, decorating, renovating, preparing them for sale or selling them I am in my element.

I am professional, knowledgeable and personable and I would love to help you sell your home or help you find one that suit’s you needs. I try very hard to offer my clients a stress-less, drama free Real Estate experience. I will do my best to meet and hopefully exceed your expectations of a Real Estate Professional.

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Office: 250.563.1000
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Crystal Brown

My name is Crystal Brown, REALTOR® at Team Powerhouse Realty. My career as a professional agent began in May 2015. Since then I have enjoyed many successes in helping people buy and sell homes.

I have lived in Prince George for nearly 20 years. During that time I have been actively involved in the community through my business and personal life, and have also taken on a variety of volunteer positions. I have built valuable networks and a deep understanding of the city and its people. I use that knowledge every day when advising residents and newcomers on their next move. Great relationships are the foundation of true success.

I continue to look ahead to the future of real estate with excitement and determination as I see many opportunities for growth in my business, as well as in my community.

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Office: 250.563.1000
Mobile: 250.981.4620
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Mark McVey

I am a long-term resident of Prince George and have been selling real estate here since 1997. I am CEO at Team Powerhouse Realty, a company I co-founded in 2007. I have a passion for helping people, and get great fulfillment out of negotiating the best terms for my loyal clientele.

I love sharing my real estate skills and knowledge with others, and am a Buffini & Company Certified Mentor. In addition to my busy work schedule, I am also actively involved in men's soccer, the Cinema CNC Film Festival and PG Roadrunners. I am also a RYT200 Certified Yoga Instructor.

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Brad Messum

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Brian Steinhauser

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Keven Braet

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Ashley Quickfall

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Kristine Newell

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Lindsey Kuemper

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Lori Cruddas

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Matt Steinbach

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Melanie Lupul

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Rick Kerbrat

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Rick Mayhew

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Robin Choi

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Tim Higham

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Don Kehler

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Harry Backlin

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Matt Vigue

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Steve Andersen

Like most realtors I began my real estate career doing residential sales, and since I live on a rural property I really enjoy doing the more complicated country property sales.

While I still enjoy helping buyers and sellers with their housing needs I have transitioned over to doing more commercial sales and leasing. I find this both interesting and challenging and feel my skills are well suited to dealing with complicated commercial/industrial/business real estate transactions.

I endeavour to provide exceptional professional service to my clients putting their needs first so they trust me, enjoy dealing with me and recommend me to their friends and acquaintances.

On a personal level I am married with two children, have lived in Prince George since childhood and have always been a real outdoorsman. Prince George has so much to offer, is a great place to raise children and I really enjoy taking the family on camping and fishing trips throughout the Prince George area and our beautiful province.

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Office: 250.563.1000
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Rolf Van Driesum

Rolf was born and raised in Prince George, BC. A previous career in construction and current involvement in the mining industry provide him with an unparalleled insight into market trends and commercial opportunities throughout the region.

Rolf is driven by a desire to provide leadership in a number of capacities, both locally and internationally. He is engaged in development opportunities in Thailand, Myanmar, and the Dominican Republic as well as in British Columbia. Rolf joined Team Powerhouse Realty in 2011, and has since become part of the management team.

Rolf is also a husband, father to four and grandfather to four. He is a member of the Westwood Church.

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Ashley Woods

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Sarah White

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Rebecca Worthington

I work by referral helping buyers, sellers and investors stay focused on their big picture goals while I focus on the details. Exceptional client care, current market expertise and strong negotiating tactics are paramount to my business. I specialize in family homes and investment properties.

My husband and I were both born and raised in Prince George and are now raising our beautiful four daughters here. This is a wonderful community to be a part of as it has so much to offer.

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