When you decide to become independent, the first thing you think about is what is best: whether to rent or buy your future home. However, not everything is black and white and there are other options that may fit your needs, such as renting with an option to buy.
Renting to buy is a very good alternative for those people who are concerned about their future and want to own a property, but perhaps their current moment is not the best to buy a home.
As we have talked about in several posts, buying a home is one of the most important steps we can take in our lives and it is not a simple process. If you want to know everything you need to know before buying a house, don't miss this post.
Therefore, renting with an option to buy is a good solution to this possible situation. A rent to buy is a contract that does not appear expressly in the Civil Code, it is an atypical option. Therefore, in a contract like this it is very important that the agreed conditions, the object of the contract and the price are very clearly defined.
Advantages of renting with option to buy
- Being able to enjoy the flat before buying it is a great advantage. Being able to live and experience it before making the big step of buying it is of great interest, so the tenant can see if the house or the flat meets his expectations. In case the tenant is not interested in buying, he/she has up to 5 years (the length of a rental contract) to live in.
- One of the other advantages is that the purchase price is fixed at the beginning of the agreement. Therefore, if after 5 years housing prices on the real estate market have risen, the price of a rent-to-own flat remains unchanged.
Disadvantages of renting to own
- One of the main disadvantages for the owner of the property is that his property is to sell his property, this contract does not ensure the sale.
- In case a property is rented, the owner has to pay taxes for the rent. You will have to pay transfer tax.
Rights and obligations in a lease with option to buy
For the landlord it is interesting to fix an initial premium for the right to purchase. Although it is not compulsory, it is a good way of ensuring that the tenant is really interested in buying the property. And if the tenant does not want to go ahead with the purchase, it should be clear to him that he will lose the premium and the instalments invested in the rent.
The owner is obliged to maintain the contract and not to assign, rent or sell the flat to third parties for the duration of the contract. On the other hand, the tenant has the right to continue renting the flat for the duration of the rental contract. The tenant also has the right to have the exclusive right to purchase within the term of the contract.
As a general rule, the purchase of the property can be made long before the lease expires. In fact, it is beneficial for both parties: the tenant does not suffer from price fluctuations and the landlord achieves his goal: to sell the property.
The final purchase price of the property cannot be changed by either party. The rental price, on the other hand, can vary according to the CPI or if the owner so wishes.
If the tenant owes more than two months' rent, he may lose the option to buy the property.
At Espígul Real Estate, we can help you find the house you are looking for: whether you are looking to rent, to buy, to rent with an option to buy or even to build a new house. With more than 30 years of experience in the real estate sector and a great team of professionals who can help you find what you are looking for.
Do not hesitate to contact us at hola@espigul.com or you can call us on 972 220 110.