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’.
Your net monthly salary must be at least GHS1,500 to qualify to use this service. This GHS1,500 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.
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
GSM - Getting Started Money AR - Annual Rent MR - Monthly Rent MO - Monthly Option MP - Monthly Payment OP - Option Payment
At the end of the maximum of 60 months (5 years) rental phase, you are expected to exit, via any of the following options:
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
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.
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.
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.