Introducing Rent to Buy Option

Good news for property buyers - Rent to Buy

Α new method to finance the purchase of a property called “Rent to Buy”.

 For Cyprus this is a breakthrough that certainly includes many advantages for sellers and buyers and would potentially boost the sales of the currently problematic real estate sector.

 It is common knowledge that one of the problems that many buyers face today is the inability to secure a loan in order to buy their own property; whether an apartment or a house.

 Even those that are able to get a loan will have a hard time coping in the current economic climate (high interest-rates, charges etc.).

 The new “Rent to Buy” method will surely mainly benefit those that are not able to obtain a loan. However, the terms are such that even those that can get a loan will benefit if they decide to use it.

At the same time, it is also to the benefit of the seller, especially during this crisis period that we are presently experiencing.

How does this particular financing scheme work?

After the buyer and the seller agree on the price of the property, the buyer makes a small down-payment. At the same time, he signs a rental agreement for 5 years and takes possession of the property. At the end of the rental period the buyer pays the remaining balance, usually after securing a loan from a bank.

 The advantages for the buyer:

 -       For the rental period, that is to say the first 5 years, he does not need to get a loan from the bank. The loan has indirectly been granted to him by the seller with more favourable terms.

-       With a small down-payment (5%-10%) he moves into his new apartment/house.

-       Part of the rent pays off the balance of the property.

-       The terms for the financing are more favourable than those of the bank (lower interest, no expenses  etc)

-       At the end of the period the balance of the payable amount to the seller is a fraction of the value making it easier to secure a bank loan.

 The example that follows is indicative of the new financing method. The seller agrees to sell to the buyer a new one-bedroom apartment for 100.000 Euros. He makes a down-payment of 5.000 Euros and takes possession of the apartment, paying a monthly rent of 620 Euros for 5 years. At the end of the five-year period he pays the balance of 77.134 Euros and the apartment title is transferred into his name.

 If the buyer can afford to pay a higher monthly rent, then his balance at the end of the five-year period will be lower.

 As an example, if he pays 720 Euros, instead of 620 Euros, at the end of the five-year period his balance will be 70.395 instead of 77.134 Euros.

 Thus, the news for property buyers is good, since this particular method offers a way out and the opportunity to acquire their own home. For more information please send us an email or contact us in order to let you know whicf of the Cyprus properties on the portal is offered with the Rent to Buy Option.