Rent-to-buy scheme: A risky option?

Rent-to-buy scheme: A risky option?

Rent to buy - Is it a risky option? Rent-to-buy is bascially where you make an agreement to buy the property at current prices. The catch with this is that property prices may drop further within the next three years and you are stuck with a fixed price agreement and Banks will also only give you a mortgage on current property values. It”s a risk … but then again so is all property investment.

You need to weigh up the pros and cons of paying rent on the property for the next three years. If you don”t buy now you will be renting anyway so at least you have the option to buy at the end of it all. If at the end of the three year period the property is not worth the agreed original price, then you are under no obligation to buy it. However, if you are paying an upfront deposit at the beginning of the rental period, you may lose this deposit. As rents are now falling, it might be an option to just rent a cheaper place for a number of years and save the difference. At least then you will have a bit of cash in the bank and can weigh up the market at that stage.

To be honest you are taking a gamble but if you buy a house now you are taking a gamble anyway. Property buying is a gamble. Just be aware of what you are getting into. Buying a house is the biggest investment you will ever make so do it with your eyes open no matter what the market conditions.

The rent-to-buy scheme definitely has some attractions for those who are having difficulty getting a deposit together. However, you need to be clear about what you are getting into and the risks involved. You may end up buying a place and being in negative equity as soon as you sign for it.

Anyway what is it about the Irish and the obsession with owning property? What”s wrong with renting? Other civilised countries don”t have a problem with long-term renting.

There are 7 comments for this article
  1. Elly at 5:21 pm

    How do you apply for this scheme and how do you qualify too. Any info would be appreciated as I’m renting and would love to get on the property ladder. Thanks.

  2. Mark Robertson at 12:46 pm

    Really interested post you have made. As many UK citizens continue to struggle to survive the recession, new opportunities to earn extra income have begun to surface. Now UK citizens can earn extra income from their homes (some of it tax-free) with the government’s new Rent a Room Scheme. This program allows homeowners to rent out a spare room and earn up to £4,250 tax-free each year. Even renters can take advantage of this opportunity, provided that it is allowable as per the lease agreement signed with their landlord.

  3. nick at 1:45 pm

    is there any rent to buy house in ballina mayo???

  4. julianne at 10:03 pm

    is there any houses in dublin available on this scheme???

  5. Pip at 2:03 pm

    Sounds interesting but there are definitely risks involved as with all property investments. Or any investments for that matter. Does anyone know where I can get a full list of these buy to let schemes in the greater Dublin area? Would be interested in checking out what’s on offer as it looks like I will never be able to afford to buy my own place at this rate.

  6. Festus Aigbe at 5:20 pm

    I am interested in Reat to Buy in an area of Co-kildare, Athy Area. And I do not know how to apply for It. please, can you send me you Telephone number so that we can talk.

    Best regards,
    Festus Aigbe

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