Why Rent to Own When You Can Just Rent?

Renting and renting to own are both valid options depending on your lifestyle and goals, and both have unique benefits. For those who anticipate relocating in the near future, renting may be the preferred option, whereas people who are looking to settle down and make an investment in their future may find what they’re looking for with rent to own solutions.

Renting VS. Renting to Own

Renting involves paying a landlord for the use of their property. Renting to own differs in that you rent your home with the intent to buy it after a set term. Rent to own programs often collect additional funds on top of rent to fund your eventual down payment on the property.

Benefits of Renting

Flexibility

Flexibility is a major advantage of renting. If you need to relocate, or move house, renting allows you to simply give notice and leave within a couple of months. You don’t need to go through the hassle of selling your home.

Lower Upfront Costs

Renting costs less upfront than homeownership because you aren’t responsible for buying the home or maintaining it. Rent is a reliable monthly cost that makes it easier to budget and plan ahead financially.

Benefits of Renting to Own

Builds Equity

Renting to own provides the opportunity to build equity over time, as well as a portion of each rental payment contributes towards eventual ownership of the property. The gradual accumulation of equity can serve as a stepping stone towards financial stability and future investments. As the home value increases, so does your equity.

Potential for Homeownership

Renting to own presents a path to potential homeownership for individuals who may not currently qualify for a traditional mortgage or lack the upfront funds for a down payment. This flexibility opens doors to those aspiring to own a home but facing obstacles in the conventional home-buying process.

Fixed Purchase Price

Having a fixed purchase price agreed upon at the beginning of the rent to own arrangement provides clarity and stability, shielding tenants from market fluctuations and ensuring they have a set goal to work towards throughout the rental period. This predictability can offer peace of mind and help tenants plan for their future housing needs more effectively. You also know the exact amount of down payment that is required to purchase the home at your predetermined purchase price.

Rent to Own Considerations

Financial Considerations

While rent to own programs have an initial deposit, there are also many financial benefits. The rent credits you pay towards your eventual down payment help you practice financial discipline. If you have poor credit or no credit, rent to own solutions give you time to build good credit and allow your score to recover from unexpected expenses.

You’re also building towards a healthier financial future. Rather than paying your landlord’s mortgage, you’re laying the foundation for owning a home of your own and building equity.

Maintenance Responsibilities

The maintenance responsibilities in a rent to own arrangement may vary. Some agreements require tenants to cover maintenance costs, while others set a dollar amount over which the landlord is responsible for maintenance. Read your contract so you can plan accordingly.

Personal Considerations

Consider your long-term goals when choosing between renting vs. renting to own. Is owning a home important to you? Do you like having the freedom to adjust your space to your needs and renovate at will? Do you plan to live in the same place for the foreseeable future? If you plan to settle down, renting to own may help you achieve your dreams of homeownership in a shorter timeframe than buying.

Which Solution is Right for Me?

Renting or renting to own is a personal choice, and what’s best for you will vary depending on your financial situation, priorities, and values. Our experienced advisors can give you expert advice on your options and help you make the choice that’s right for you.

Own Your Home Sooner with JAAG Properties

No matter your situation, you can own your home sooner with our Rent to own program! Apply online today or contact us for more information.

How Does Rent-to-Own Housing Work?

Rent-to-own housing, or lease-option/lease-to-own, is a type of agreement in which a tenant rents a property for a certain period of time, with the option to purchase the property at the end of the lease. This type of arrangement can provide benefits for both the tenant and the landlord, as it allows the tenant the opportunity to purchase a home without the immediate financial commitment of a traditional mortgage while also allowing the landlord to sell the property at a predetermined price.

The Rent-to-Own Housing Process

Step 1: Tenant Finds a Property

The process of rent-to-own housing typically starts with the tenant finding a property they are interested in purchasing. They will then enter into a lease-option agreement with the landlord, which outlines the terms and conditions of the agreement. This will typically include the length of the lease, the purchase price of the property, and the portion of the rent that will be applied towards the purchase price.

Step 2: Tenant Pays Monthly Rent for the Selected Property

During the lease period, the tenant will pay a monthly rent, with a portion of that credit applied towards the purchase price of the property. This can be a great way for the tenant to build credit and save for a down payment. The portion of the credit applied towards the purchase price can be used as a down payment when the tenant is ready to purchase the property.

Step 3: Tenant Gets the Option to Purchase the Property

At the end of the lease period, the tenant has the option to purchase the property for the agreed upon purchase price. This can be a great way for the tenant to become a homeowner, as they have had the opportunity to save money towards the purchase price while renting the property. The tenant also knows the end purchase price without wondering what a house will be worth in 3-5 years.

The Benefits of Rent-to-Own Housing for Landlords

For the landlord, rent-to-own housing can be a great way to increase the potential selling price of the property. As the tenant is paying a portion of the rent towards the purchase price, the landlord sells the property at a predetermined price than if they had rented it out traditionally. Additionally, rent-to-own housing can also be a great way to attract and retain high-quality tenants, as the tenant is more likely to take care of the property if they have the option to purchase it in the future.

Key Considerations for Rent-to-Own Agreements

It’s important to note that rent-to-own agreements can be complex, and it’s crucial that both the tenant and landlord fully understand the terms and conditions of the agreement. It is also important for both parties to have legal representation to ensure that the agreement is fair and legally binding.

Example of How Rent-to-Own Housing Works

Jane is a tenant who is interested in purchasing a home, but currently does not have the financial means to do so. She applies to a Rent to Own Company who buys a property that Jane is interested in purchasing. They agree on the following terms for their rent-to-own agreement:

  • The lease will be for a period of three years.
  • The purchase price of the property is $400,000.
  • Jane will pay $2,000 per month in rent, with $300 of that rent applied towards the purchase price of the property.
  • At the end of the three-year lease, Jane has the option to purchase the property for $400,000, with the $10,800 she has saved from the rent applied towards the purchase price.
  • If Jane decides not to purchase the property at the end of the lease, she is not obligated to purchase and can move out.
  • During the lease period, Jane will be paying rent, but also saving money towards the purchase price of the property. At the end of the lease, she has the option to purchase the property for $400,000 and her savings from the rent applied towards the purchase price, which can help her to be able to afford it.

For Michael, the landlord, he can sell his property in 3 years.

It is important for both Jane and Michael to consult with legal representation to ensure the agreement is fair and legally binding, and to review the terms and conditions of the agreement before signing.

Start Your Rent-to-Own Housing Journey with JAAG Properties

Embarking on your rent-to-own housing journey with JAAG Properties opens a gateway to a unique and flexible path towards homeownership. The rent-to-own housing process provides an opportunity for individuals to ease into homeownership while enjoying the benefits of renting. Take the first step with JAAG Properties and let the journey towards homeownership unfold with confidence and assurance.

Rent vs. Buy: Why Context Matters

In today’s ever-changing real estate market, the debate about the benefits of renting vs buying a home continues. Which option is better? As with most things, the answer is that it depends on your situation. We’re reviewing the benefits and costs of renting vs buying to help you make an informed decision for your future.

Pros and Cons of Buying vs. Renting

You may have heard that renting is “throwing away money” because you aren’t building equity. On the other hand, you also aren’t incurring the many expenses associated with homeownership. The truth is that both options have pros and cons, and ultimately, it’s up to you to decide what best fits your lifestyle and your financial reality.

Pros of renting:

  • Your landlord covers the cost of maintaining and repairing your unit, as well as property taxes and insurance.
  • Utilities may be included in your rent.
  • No long-term commitment.

Cons of renting:

  • You can’t build equity.
  • Monthly rent may be higher than a monthly mortgage payment.
  • You’re limited in changes you can make to your unit, and any improvements ultimately benefit your landlord.
  • Risk of moving

Pros of buying:

  • Gaining equity can help you build wealth in the long-term.
  • You can remodel and update your home as you see fit.
  • A monthly mortgage payment may be less than a monthly rental payment (but don’t forget the other costs associated with homeownership).

Cons of buying:

  • You are responsible for all costs, including property taxes, insurance, maintenance, and more.
  • Purchasing a home is a large upfront cost that far outweighs the upfront cost of renting.
  • Ownership is a major commitment in terms of time, money, and labour.

Key Differences Between Buying and Renting

Rent vs Mortgage

Rent is a payment to the landlord for use of their property and can change periodically. In contrast, a mortgage payment is a combination of interest and principal on your loan and is typically stable over the mortgage term. Unlike renters, homeowners build equity as they pay down their mortgages.

Property Taxes

Homeowners pay property taxes and can deduct this from their income tax return. Renters don’t typically pay property taxes.

Maintenance

As a homeowner, you’re responsible for maintenance and repairs. Renters aren’t responsible for these costs; the landlord is legally required to maintain their units.

Lifestyle

Renting requires significantly less commitment than buying. If you like where you live, have a stable job, and plan to live there for at least 3-5 years, buying may be the right option for you. However, if you plan to move within the next 3 years or lack job security, renting may make more sense for you.

Achieve Your Dream of Homeownership with JAAG Properties

In the end, there are benefits to both renting and owning. Thankfully, our Rent to Home Solution offers you the best of both worlds, allowing you to rent your home from us while you save money to become a homeowner. Contact us today to learn more about how you can rent to own your home!

Everything You Need to Know About Rent-to-Own in Canada

What is Rent-to-Own Housing?

Rent-to-own homes, also known as lease-option or lease-to-own homes, are an increasingly popular housing option for Canadians looking to buy a home. These types of homes allow renters to live in a property while they work on improving their credit or saving for a down payment, with the option to purchase the home at the end of the lease period.

How Does Rent-to-Own Housing Work in Canada?

In a rent-to-own agreement, the renter pays a higher monthly rent than traditional renting, which will include a portion of the rent being applied towards the down payment. The renter will then have the option to purchase the home at the end of the lease period, typically one to three years, at a pre-agreed price.

Why Would Someone Want To Purchase A Home Through A Rent-to-Own Provider?

One of the major benefits of rent-to-own homes is that they provide an opportunity for renters to become homeowners who may not qualify for a traditional mortgage. Renters can use the time during the lease period to improve their credit score, save for a down payment, or address any other issues that may be preventing them from obtaining a mortgage.

What Are the Main Benefits of Rent-to-Own Housing?

Another benefit of rent-to-own homes is that they offer more stability than traditional renting. Renters are able to establish roots in a community and may even be able to make improvements to the property, such as painting or landscaping, that can increase its value.

What Is The Difference Between A Rent to Company and a Private Rent-to-Own Landlord?

Rent-to-own companies may have a portfolio of properties available for rent-to-own and may have more structured agreements and professional management. They may also allow clients to work with a realtor to find and choose their own home on the market. On the other hand, private landlords may have only one property available for rent-to-own, and the agreement and management may be less formal.

The Benefits of Entering a Rent-to-Own Agreement in Canada

Alternative Means to a Mortgage

One of the major benefits of rent-to-own homes is that they provide an opportunity for renters who may not qualify for a traditional mortgage to become homeowners. Renters can use the time during the lease period to improve their credit score, save for a down payment, or address any other issues that may be preventing them from obtaining a mortgage.

More Stability When Compared to Renting

Another benefit of rent-to-own homes is that they offer more stability than traditional renting. Renters are able to establish roots in a community and may even be able to make improvements to the property, such as painting or landscaping, that can increase its value.

Considerations of a Rent to Home Solution

Different from Traditional Renting

It is important to note that rent-to-own agreements are typically more complex than traditional rental agreements, and it is important for both the renter and the homeowner to fully understand the terms of the rent-to-own agreement before signing on. Some important considerations include the length of the lease period, the purchase price of the home, and any penalties for breaking the agreement.

Potential for Increased Down Payment

Home buyers should also be aware that rent-to-own homes may require a higher down payment or higher monthly rent payments than traditional rental properties. Additionally, rent-to-own agreements may not be available in all areas, so it is important for buyers to research their options in their desired location.

Rent-to-Own Provides More Options for Canadians

Overall, rent-to-own homes can be a great option for Canadians looking to become homeowners but may have trouble obtaining a traditional mortgage. By providing an opportunity to improve credit and save for a down payment, rent-to-own homes can help renters achieve the goal of homeownership. However, it is important for both parties to fully understand the terms of the agreement and for buyers to research their options in their desired location.

Let Us Help Find You a Home

At JAAG Properties, we want to help find the perfect home for you. Contact us today for more information on buying a house in Canada through our Rent to Home Solution or to speak with one of our team members.

Understanding The Canadian Real Estate Market

Understanding the Canadian real estate market is essential before making any real estate investments. It’s important to research market trends, different regions, property types, and economic conditions to make an informed investment decision.

Ways to Learn About the Canadian Property Market

1. Investigate Real Estate Market Trends

One way to research the Canadian real estate market is by looking at real estate market trends, such as housing prices, rental rates, and inventory levels. Websites such as the Canadian Real Estate Association (CREA) and the Canadian Mortgage and Housing Corporation (CMHC) provide valuable data and insights on the Canadian housing market.

2. Look at Regional Market Conditions

Another important aspect of researching the Canadian real estate market is understanding the different regions and the unique real estate market conditions of each region. Websites such as Realtor.ca and Zillow allow you to search for properties and view market trends by region.

3. Consider Property Types

When researching property types, it’s important to consider the different types of properties available, such as single-family homes, multi-unit properties, rent-to-own properties, and commercial properties. Websites such as LoopNet and Commercial Real Estate provide information and listings on commercial properties.

4. Analyze Economic Conditions

Economic conditions also play a vital role in the Canadian real estate market. Websites such as the Bank of Canada and the Economic Development Agency of Canada provide data and insights on the Canadian economy and how it may impact the real estate market.

Tools to Research the Canadian Real Estate Market

The following websites provide valuable data and insights on the Canadian housing market:

Stay Up-to-Date with the Canadian Real Estate Market

The Canadian real estate market is constantly changing. That’s why it’s important to research the property and housing market before making any life-changing investment decisions. JAAG Properties is here to support all of your real estate needs and answer any questions you may have. Get in touch with our team to learn more about the Canadian real estate market.

Different Types of Real Estate Investments In Canada

Real estate investment in Canada offers a range of opportunities to build wealth and earn passive income. There are several types of real estate investment options available, each with its own set of benefits and risks. In this blog, we will provide an overview of the different types of investments available to Canadians.

Traditional Rental Properties

Traditional rental properties are properties that are purchased and then rented out to tenants on a long-term basis. This type of real estate investment can provide a steady stream of rental income and the potential for appreciation in the property’s value over time.

Vacation Rentals

Vacation rentals are properties that are rented out on a short-term basis, typically to vacationers or travelers. This type of real estate investment can provide higher rental income compared to traditional rental properties, but it also comes with more responsibilities, such as managing bookings and dealing with a higher turnover of tenants.

Rent-to-Own Properties

Rent-to-own properties are properties where the tenant rents the property for a set period of time with the option to purchase the home at the end of the rental period. This type of real estate investment can provide a steady stream of rental income and the potential for appreciation in the property’s value over time, and also it can help tenants to achieve their homeownership dream.

Commercial Properties

Commercial properties are properties that are used for business purposes and can include office buildings, warehouses, and retail spaces. This type of real estate investment can provide a steady stream of rental income, but it also comes with more responsibilities such as managing tenants, and dealing with maintenance and repairs.

Multi-Unit Residential Properties

Multi-unit residential properties include apartments, townhouses, and duplexes, that are rented out to tenants. This type of real estate investment can provide a steady stream of rental income and can be less demanding than managing a commercial property.

Real-Estate Investment Trusts (REITs)

REITs are investment vehicles that allow investors to purchase shares in a portfolio of properties, giving them exposure to real estate investments without the responsibility of managing the properties themselves.

Which Real Estate Investment is Best for Me?

Each type of real estate investment has its own set of benefits and risks, it’s important to understand the different options available and the steps to take to make a successful investment. Canada offers a range of real estate investment options, including traditional rental properties, vacation rentals, rent-to-own properties, commercial properties, multi-unit residential properties, and REITs. As a result, it’s essential to thoroughly research the property, the neighbourhood, and the potential return on investment before making a decision.

With so many real estate investment options available, it’s important to consult with real estate investing experts before making any decisions. Contact our team to start investing in Canadian real estate today.

Investing in Real Estate with a Rent-to-Own Company

Investing in rent-to-own properties can be a smart way to build wealth and earn passive income. One option is to enter into a joint venture partnership with a rent-to-own company

What is a Joint Venture Partnership?

A joint venture partnership is a legally binding agreement. Therefore, it’s important to have a clear understanding of the terms of the partnership, including the percentage of profits, management fee, and responsibilities of each party. As a real estate investor, it’s also important to do your due diligence and research the rent-to-own company to ensure they have a good reputation and track record of successful partnerships.

How Does a Joint Venture Partnership with a Rent-to-Own Company Work?

  1. The private investor provides the capital to purchase a rent-to-own property (usually a single-family home or small multi-unit building) and goes on title 
  2. The rent-to-own company finds a qualified tenant and manages all aspects of the tenant screening, lease agreement, and property management.
  3. In return for their investment, the private investor receives a percentage of the rental income and shares in the appreciation of the property’s value when the tenant exercises the option to purchase.
  4. The rent-to-own company receives a percentage of the rental income.
  5. Both parties split the profits when the tenant purchases the property. This type of partnership allows the private investor to earn passive income and build wealth over time, while the rent-to-own company can increase their portfolio of properties.

Examples of Joint Venture Partnerships:

1. Rent-to-Own Company & Private Investor Helping a Family

A rent-to-own company, such as JAAG Properties, and a private investor form a joint venture partnership to provide a hassle-free home ownership solution for families who may not qualify for traditional financing. The rent-to-own company specializes in helping clients secure properties that are suitable for rent-to-own arrangements, while the private investor provides the capital and purchases the properties.

The joint venture partnership allows the rent-to-own company to expand their business and provide more affordable housing options to families, while the private investor can earn a steady return on their investment through real estate.

The rent-to-own company works with the families to find properties that fit their needs and preferences, and helps them navigate the rent-to-own process, including setting up a structured rent-to-own agreement that allows the clients/individuals to gradually build up a down payment while they are renting the property.

The private investor, in this partnership, sees it as a way of giving back to the community (Impact Investing) by providing opportunities for families to achieve their dream of homeownership. 

As the partnership progresses, the rent-to-own company works with the families to qualify for traditional financing and eventually purchase the property.

2. Rent-to-Own Company & Private Investor

A rent-to-own company and a private investor decide to form a joint venture partnership in order to purchase properties. The rent-to-own company brings their expertise in managing and maintaining rental properties, while the private investor provides the capital and purchases the properties.

Under the terms of the joint venture agreement, the rent-to-own company will handle the day-to-day operations of the properties, including finding and screening tenants, collecting rent, and performing inspections. The private investor will provide the funds to purchase and renovate the properties, and will receive a percentage of the rental income and appreciation of the properties in return.

The partnership structure can be different case to case and can be adjusted as per the agreement between the parties involved. The exact terms of the partnership will be outlined in a joint venture agreement, which will be legally binding on both parties.

Invest in Real Estate with JAAG Properties

Want to learn more about rent-to-own property investing? JAAG Properties is here to help you navigate the joint venture partnership process.

How To Invest In Real Estate In Canada

Investing in Canadian real estate can be a great way to build wealth and earn passive income. However, it can also be a complicated endeavor because there are many ways to build your portfolio, including rent-to-own housing. As a result, it’s important to understand the different options available and the steps to take to make a successful investment for your future. In this blog, we will outline the steps for how to successfully invest in property in Canada.

1. Understand the Canadian Real Estate Market

Before making any investments, it’s important to understand the Canadian real estate market. This includes researching different regions, property types, and economic conditions.

2. Develop an Investment Plan

Once you have a good understanding of the market, develop a plan for your investment. This should include your investment goals, budget, and the type of property you’re interested in.

3. Get Pre-Approved for a Mortgage

If you plan to purchase a property, getting pre-approved for a mortgage can help you understand how much you can afford to spend and give you an edge when making an offer on a property.

4. Research the Different Types of Real Estate Investments

In Canada, there are several types of real estate investment options available, such as traditional rental properties, vacation rentals, and rent-to-own properties.

5. Consider Investing in Rent-to-Own Properties

Rent-to-own properties can be a great option for investors looking to earn passive income and build wealth over time. With a rent-to-own property, a tenant rents a home for a period of time with the option to purchase the home at the end of the rental period.

6. Find a Reputable Real Estate Agent or a Rent-to-Own Company

Finding a reputable real estate agent or a rent-to-own company can help you find the best investment opportunities and guide you through the process of purchasing or managing a property.

7. Do Your Due Diligence

Before making any investment, it’s important to do your due diligence and thoroughly research the property, the neighborhood, and the potential return on investment.

8. Get a Property Inspection

Before purchasing a property, it’s a good idea to get a property inspection to ensure that the property is in good condition and that there are no major repairs needed.

Start Your Real Estate Investment Journey with JAAG Properties

By understanding the market, developing a plan, and considering different investment options such as rent-to-own properties, you can increase your chances of real-estate investment success. To learn more about investing in real estate in Canada, get in touch with the real estate investment experts at JAAG Properties. 

Investing In Rent-to-Own Housing

Investing in rent-to-own housing can be a great way to build wealth and earn passive income. With a rent-to-own property, a tenant rents a home for a period of time with the option to purchase the home at the end of the rental period. This type of investment can be a win-win for both the investor and the tenant.

Benefits of Investing in Rent-to-Own Housing for Investors

For investors, rent-to-own properties offer a steady stream of rental income, as well as the potential for appreciation in the home’s value. Additionally, the tenant is responsible for maintaining the property and paying for any repairs or upgrades, which can save the investor time and money.

For Investors:

  • Provides a steady stream of rental income
  • Potential for appreciation in the home’s value
  • Tenant is responsible for maintaining the property and paying for any repairs or upgrades
  • Can save the investor time and money

Benefits of Investing in Rent-to-Own Housing for Tenants

For tenants, rent-to-own properties offer a chance to live in a home they may not be able to purchase right away. The tenant has the opportunity to save for a down payment and improve their credit score while living in the home. When the rental period ends, the tenant has the option to purchase the home, which can be a great way to achieve the dream of homeownership.

For Tenants:

  • Offers a chance to live in a home they may not be able to purchase right away
  • Opportunity to save for a down payment and improve credit score while living in the home
  • Can be a great way to achieve the dream of homeownership

How Does Rent-to-Own Housing Work?

A client completes an application and let’s say are approved for a home at $250,000 based on their situation.

The investor purchases a three-bedroom, two-bathroom home for $250,000. The investor then rents the home out to a tenant for $2,000 per month which includes a rent-to-own option consideration. The rental agreement states that the tenant has the option to purchase the home for $300,000 within the next three years.

  • The tenant moves into the home and begins paying $2,000 in rent each month. The tenant also pays for any repairs or upgrades to the property as outlined in the rental agreement. After three years, the tenant decides they want to exercise their option to purchase the home.
  • The tenant has saved enough money for a down payment and has improved their credit score. The tenant then obtains a mortgage loan and purchases the home for $300,000 as outlined in the rental agreement.
  • As the investor, you have been receiving a steady rental income for three years, and have now sold the property for a profit. The tenant has been able to live in the home, save for a down payment, and improve their credit score, which helped them to purchase the home they were renting.

It’s important to note that the scenario described above is just one example and the terms of the rental agreement can vary, such as the length of the rental period, the option fee, and purchase price. It’s essential to have a clear and legally binding agreement with the tenant that outlines the terms of the rent-to-own arrangement.

How Does a Joint Venture Partnership Between a Rent-to-Own Company & A Private Investor Work?

Example 1:

A joint venture partnership between a rent-to-own company and a private investor can be a great way to invest in rent-to-own properties. This type of partnership allows the private investor to invest in rent-to-own properties without having to manage the properties themselves, while the rent-to-own company handles the tenant screening, lease agreement, and property management.

In a joint venture partnership, the rent-to-own company finds a qualified tenant and handles all aspects of the tenant screening, lease agreement, and property management. The private investor provides the capital to purchase the rent-to-own property, typically a single-family home or a small multi-unit building and obtains the mortgage. The rent-to-own company then finds a qualified tenant and handles all aspects of the tenant screening, lease agreement, and property management. In return, the private investor receives a percentage of the rental income and shares in the appreciation of the property’s value when the tenant exercises the option to purchase. The rent-to-own company, in turn, receives a percentage of the rental income and an agreed upon management fee for their services. Both parties then split the profits when the tenant purchases the property.

This type of partnership allows the private investor to earn passive income and build wealth over time, while the rent-to-own company can increase their portfolio of properties and earn a management fee. It’s a win-win for both parties.

However, it’s important to understand that a joint venture partnership is a legally binding agreement, and it’s essential to have a clear understanding of the terms of the partnership. This includes the percentage of profits, management fee, and responsibilities of each party. It’s also important to do your due diligence and research the rent-to-own company to ensure they have a good reputation and track record of successful partnerships.

Example 2:

A private investor, John, is interested in investing in rent-to-own properties but doesn’t have the time or experience to manage the properties on his own. He partners with a reputable rent-to-own company, JAAG Rent to Home, which specializes in managing rent-to-own properties.

The partnership between John and JAAG Rent to Home works as follows:

  • JAAG Rent to Home finds a qualified tenant and handles all aspects of the tenant screening, lease agreement, and property management.
  • John provides the capital to purchase a rent-to-own property, which is typically a single-family home or a small multi-unit building and obtains the mortgage.
  • JAAG Rent to Home finds a qualified tenant and handles all aspects of the tenant screening, lease agreement, and property management.
  • John receives a percentage of the rental income and will share in the appreciation of the property’s value when the tenant exercises the option to purchase.
  • JAAG Rent to Home receives a percentage of the rental income and an agreed upon management fee for their services.
  • John and JAAG Rent to Home split the profits when the tenant purchases the property.

In this example, John gets to invest in rent-to-own properties without having to manage the properties himself. He can rely on the expertise and experience of JAAG Rent to Home to handle all aspects of the tenant screening, lease agreement, and property management. In return, the rent-to-own company gets to increase their portfolio of properties and earn a management fee. This partnership allows both parties to benefit from the investment.

This is just one example of how a joint venture partnership can work, and the terms of the partnership can vary. It’s crucial to have a clear and legally binding agreement that outlines the terms of the partnership, including the percentage of profits and management fee.

Should You Invest in Rent-to-Own Housing?

When investing in rent-to-own housing, it’s important to do your due diligence and find a property in a desirable location with good schools and amenities. You should also make sure that the rental price is in line with market rates and that the purchase price is fair. Additionally, you should have a clear and legally binding agreement with the tenant that outlines the terms of the rent-to-own arrangement.

Investing in rent-to-own housing can be a great way to build wealth and earn passive income. By providing tenants with a chance to achieve homeownership, you can help them achieve their dreams while also building your own financial future. Contact our team to start investing in rent-to-own housing today.

Rent-to-Own: A Smart Investment for Parents and Children

Investing in a rent-to-own property can provide parents and their children with a number of significant benefits. In this blog, we will explain the benefits of investing in rent-to-own properties for families.

Benefits of Investing in Rent-to-Own Property

Long-Term Financial Gain

One of the main benefits is the potential for long-term financial gain. By purchasing a property and renting it out with the option to buy, parents can earn rental income and potentially see appreciation in the property’s value over time. This can help them to build wealth and secure their own financial future.

Real Estate Experience

Becoming a landlord through a rent-to-own investment can also provide parents with valuable real estate experience. This can serve as a stepping stone for them to make further investments in the future and expand their portfolio.

Path to Homeownership

Another important benefit is the opportunity to provide a path to homeownership for their children. Many young people today struggle to afford the high down payments and closing costs associated with traditional home buying. Rent-to-own allows them to live in a home and make monthly rent payments that go towards the purchase price of the home. This can help them to save for a down payment and improve their credit score, making it easier for them to qualify for a mortgage in the future.

Furthermore, rent-to-own can also provide children with a sense of stability, as they can live in a property long-term without fear of being evicted or having to move frequently. This can also provide a sense of continuity for parents, knowing that their children have a stable and secure place to call home.

Rent-to-Own Property Investment Example

Mrs. and Mr. Smith, a couple of parents, are looking to invest in a property that can provide them with a long-term financial gain and also benefit their child. They come across JAAG Rent to Home, a company that specializes in rent-to-own. They find a property that suits their needs and budget and decide to purchase it with JAAG Rent to Home.

JAAG then rent the property to their child, who is currently struggling to save for a down payment and improve their credit score to qualify for a traditional mortgage. The child pays the rent, which goes towards the purchase price of the home. The rent-to-own agreement also gives the child the option to purchase the home at a later date, with a portion of the rent paid credited towards the down payment.

In this scenario, the parents are the private investors, and their child is the tenant. The parents are able to earn rental income while they wait for the child to be ready to purchase the home. Additionally, they also gain valuable real estate experience, and the child can live in a stable and secure home while working towards homeownership.

Why Should You Invest in a Rent-to-Own Property with JAAG Properties?

Investing in a rent-to-own property for your children can be a smart financial move for parents too. It offers the potential for long-term financial gain, valuable real estate experience, and the opportunity to provide a path to homeownership for their children. Before entering into a rent-to-own agreement, seek legal and financial advice to make sure that it’s the right fit for your financial situation and goals. Contact JAAG Properties to learn more.