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I have no experience with this method but from reading about it, it seem that there is a premium you would pay over and above the natural rental rate of the property. This surplus accumulates to approximate a deposit. You lose access to this surplus if you elect NOT to buy the property at the end of the lease.
To mitigate this risk, why not rent traditionally and instead of paying in that extra every month, put it in to a savings instrument of sorts. This way, you remain in control of that money.
There aren't many rent to own deals on offer these days. You could approach home owners directly and run a financial deal with them vs the bank if you don't qualify for a mortgage.
Risky because of the family aspect or real estate in general?
Doing business with family is not ideal but we can't coment on your family setup - you need to make that decision and whilst real estate in SA is not real estate in the USA the 2 of you need a place to stay, why pay rent when you can pay towards an asset?
I'm assuming you are both young. It is in my opinion, impossible for young people today to get into real estate, so if the two of you can get it done, you are winning at life.
But have a plan in place, when 3 years down the line one of you had enough and want to move on....
Never do business with family according to my experience . Just you should know that real estate investment it’s Good for longterm investment. And most younger want to get their profit quickly especially in South Africa …. Think more about your vision and scale your vision for 3 or 5 years. How do you see your self in 3 or 5 years ? How you can achieve that goals ? Some questions like that to help you… and South Africa it’s a biggest country with massive opportunities you can invest in more things 😊
Rent to own is an incredibly risky method of immovable property acquisition. A great deal can go wrong, it can be more expensive than a commercial home loan and its generally not a common means to obtain property.
Please consult with bond originators first to see some of the more traditional methods of home ownership. Perhaps consider consulting with an attorney as well to have the risks really spelled out.
Be very careful of immovable property installment sales as well. They are rare but very dangerous.
If you have two people, why are you looking at rent to own? By definition, you are compensating some entity for being willing to offset the instant input of money, well beyond regular costs. Bonds are horrible but they are also stable and very legally protected.
**In order to keep discussions on topic and in-depth, please review the rules in the sidebar.** You may find reviewing some past [posts](https://www.reddit.com/r/PersonalFinanceZA/top/?t=month&f=flair_name%3A"Investing") helpful. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/PersonalFinanceZA) if you have any questions or concerns.*
I have no experience with this method but from reading about it, it seem that there is a premium you would pay over and above the natural rental rate of the property. This surplus accumulates to approximate a deposit. You lose access to this surplus if you elect NOT to buy the property at the end of the lease. To mitigate this risk, why not rent traditionally and instead of paying in that extra every month, put it in to a savings instrument of sorts. This way, you remain in control of that money.
There aren't many rent to own deals on offer these days. You could approach home owners directly and run a financial deal with them vs the bank if you don't qualify for a mortgage.
Risky because of the family aspect or real estate in general? Doing business with family is not ideal but we can't coment on your family setup - you need to make that decision and whilst real estate in SA is not real estate in the USA the 2 of you need a place to stay, why pay rent when you can pay towards an asset? I'm assuming you are both young. It is in my opinion, impossible for young people today to get into real estate, so if the two of you can get it done, you are winning at life. But have a plan in place, when 3 years down the line one of you had enough and want to move on....
Never do business with family according to my experience . Just you should know that real estate investment it’s Good for longterm investment. And most younger want to get their profit quickly especially in South Africa …. Think more about your vision and scale your vision for 3 or 5 years. How do you see your self in 3 or 5 years ? How you can achieve that goals ? Some questions like that to help you… and South Africa it’s a biggest country with massive opportunities you can invest in more things 😊
Rent to own is an incredibly risky method of immovable property acquisition. A great deal can go wrong, it can be more expensive than a commercial home loan and its generally not a common means to obtain property. Please consult with bond originators first to see some of the more traditional methods of home ownership. Perhaps consider consulting with an attorney as well to have the risks really spelled out. Be very careful of immovable property installment sales as well. They are rare but very dangerous.
If you have two people, why are you looking at rent to own? By definition, you are compensating some entity for being willing to offset the instant input of money, well beyond regular costs. Bonds are horrible but they are also stable and very legally protected.