Rent to Buy is a viable alternative route to home ownership for low-income working households. Many people aspire to home ownership but believe they can’t due to obstacles like employment or credit issues. This can provide you with the opportunity to save for a deposit to go on and purchase the home in the future. The main attraction of the Rent to Buy scheme is the low barrier to stepping onto the property ladder, providing new-build and existing homes at flexible ownership terms.

There are a number of different names that are used for the Rent to Buy scheme depending on where you live. Also known as (a.k.a.): ‘Try before you buy’, ‘Rent save buy’, ‘Rent to own’, and ‘Intermediate market rent’.

 

Qualifying Income

Your net monthly salary must be above GHS2,000 to qualify to use this service. This GHS2,000 floor could also be the net monthly income of your household (total of that of yourself, spouse, and where applicable children).

 

Rent to Buy Homes

The vast majority of available rent to buy homes are new build homes from in-house.

Occasionally, we acquire houses every month and/or quarter from homeowners who need to sell for one reason or another. Often times we remodel the homes to bring them up to date and up to insanely great shape for a new rent to own tenant / buyer like yourself to move into.

 

Rent to Buy Agreements

Usually the monthly rent on a rent to buy house with us is a bit higher than the monthly rent on a non-rent to buy house (because you’re paying for the chance to purchase the house at a pre-determined price which ties the seller down as well). Rent-to-Buy agreements consist of two parts: a standard rental agreement and an option to buy. No two RTB contracts are the same - Our may differ slightly from what may be available elsewhere, including even what the group even offers in the UK. Ghana is a special project for us and would be treated as such.

1. Rental Agreement

2. Option to Buy Agreement

 

The tenant-buyer cannot sub-let this property. The tenant-buyer cannot sell his option to a third party during the 5-year period under the same or different terms.

The buyer’s right to purchase is valid as long as he/she does not delay his monthly payments. However, there is a provision for a small delay in payments during the option period.

 

 

Rental Period

We allow up to 5 years (60 months) rental period for this scheme - Non-renewable. After the time period has elapsed, rent to buy homes give you the option of buying the property outright or upgrading to a conventional mortgage. It is expected that you should have taken this unmatched 60 months period to save up substantial money, either from improved employment, business income or multiple sources of income.

If you choose not to purchase the property however, or are financially unable too, then you must move out of the rented accommodation after five years (60 months).

 

Monthly Rent (MR)

The annual normal rent is usually around 5-10% of selling property price. So for example, for our starter home of GHs120,000, the annual rent will be within GHs6,000 - GHs12,000 -- monthly rent being within GHs500 - GHs1,000.

 

Getting Started Money (GSM)

This is usually, 6-24 months of monthly rent (MR). So for the example above, the GSM for a GHs120,000 rent to buy home will be within GHs3,000 and GHs24,000.

 

Option Payment (OP)

This is usually a minimum of 20% of the Monthly Rent (MR). So for a monthly rent of GHs500, the Option Payment (OP) will be GHs100.

 

Buying Option at end of Rental

Anytime, you are ready to exercise your rights to buy, the OP and GSM are used as your home equity, but not the Monthly Rent (MR).

So for example,

The GSM for the GHs120,000 home with GHs500 monthly rent will be GHs3,000 (for 6 months option), GHs6,000 (for 12 months option), and GHs12,000 (for 24 months option)

Home Equity At Rental Expiration (HEARE) will be >>

a. OP + GSM = GHs6,000 (monthly OP of GHs100 times 60 months) + GHs3,000 (for 6 months) = GHs9,000 (represents 7.5% of the original property selling price)

b. OP + GSM = GHs6,000 (monthly OP of GHs100 times 60 months) + GHs6,000 (for 12 months) = GHs12,000 (represents 10% of the original property selling price)

c. OP+ GSM = GHs6,000 (monthly OP of GHs100 times 60 months) + GHs12,000 (for 24 months) = GHs18,000 (represents 15% of the original property selling price)

 

Summarized in the attached table below, for both One & Two Bedroom Rent to Buy Houses:

A. Computations based on our Starter Price of a ONE-BEDROOM at GHS120,000

Legend:

GSM - Getting Started Money        AR - Annual Rent        MR - Monthly Rent        MO - Monthly Option     MP - Monthly Payment        OP - Option Payment

Number of Bedrooms
 One Bedroom
 One Bedroom
 One Bedroom
 One Bedroom
 
Duration
 5 yrs
 5 yrs
 5 yrs
 5 yrs
 
GSM
 GHS 3,000
 GHS 6,000
 GHS 9,000
 GHS 12,000
 
AR
 GHS 8,400
 GHS 7,800
 GHS 7,200
 GHS 6,000
 
MR = AR divided by 12
 GHS 700
 GHS 650
 GHS 600
 GHS 500
 
MO
 GHS 140
 GHS 130
 GHS 120
 GHS 100
 
MP= MR + MO
 GHS 840
 GHS 780
 GHS 720
 GHS 600
 
OP = MO x 60
 GHS 8,400
 GHS 7,800
 GHS 7,200
 GHS 6,000
 
Home Equity after 5yrs (GSM + OP)
 GHS 11,400
 GHS 13,800
 GHS 16,200
 GHS 18,000
 

..

 

 

Exit Options

At the end of the maximum of 60 months (5 years) rental phase, you are expected to exit, via any of the following options:

Option 1:

You are expected to pay the difference of the property in full to complete the sale, i.e.

a. GHs120,000 - GHs9,000 = GHs111,000

b. GHs120,000 - GHs12,000 = GHs108,000

c. GHs120,000 - GHs18,000 = GHs102,000

 

Option 2:

You use your Home Equity At Rental Expiration (HEARE) as a down-payment for a conventional home mortgage or pension mortgage or family mortgage with us, or with any external lender of your choice.

 

Option 3:

If you decide not to exercise your rights to buy the home you've been renting for up to 5yrs, then you are expected to vacate the property and you forfeit your GSM and OP (HEARE).

You forfeit your HEARE because it compensates for our inability to increase the monthly rent or market to sell the home for the entire period you were occupying the property, as you benefit from the stable rent and equity build-up up to 5yrs.

 

Eligibility

You must be a salaried worker (public or private sector) or a registered business owner, who can pay a minimum of GHs500 per month. See more here.

 

Rent to Buy Homes

All the properties available for rent to buy are all from our property investment portfolio, that are either built for sale, built for rent or acquired from third-parties for our portfolio.

 

How do I register my interest or signup?

It's free to register your interest or signup. No Upfront Fees Required!!

You just need to pre-qualify by just providing us your proof of employment (appointment/employment letter), proof of steady income (payslip) and government-issued photo ID.

Note that, payslip for CAGD-Paid Government workers generated via gogpayslip.com can be accepted as proof of both employment and income.

Register here. We would provide you your free login details after successful verification and validation of your provided information, to enable you login here to proceed.

 

 


Not convinced by rent to buy? No problem, there are alternative home buying options like Conventional Home Mortgages, Pension Mortgages, Family Mortgages, etc available with DCANS Properties LLC directly.