In the news last week we saw this article about a number of people losing their homes in Queensland who were purchasing their properties using the Rent to Own strategy. This kind of business practice is not only bad for our chosen field of business but is downright deplorable and highly immoral.
The Vendor Finance Association committee and members were aghast and disgusted at the deplorable actions that led to these people losing their homes. There is no place for this kind of behaviour or business practice anywhere.
There is a huge need for lease Option/ Rent to Buy homes to be available in our market place. A lot people simply cannot save the massive deposits or comply with the demands of the banking system. A great many have been able to buy their Lease Option properties, but unfortunately due to the small number of bad operators the whole strategy is being tarnished
What consumer groups should be focusing on is “informing” consumers on how to best have their Lease Option contracts properly set up and what consumers should demand be put in place to ensure success. Unfortunately this kind of information is not made available.
All this misery could have been avoided with one simple process being put into place. Management. These types of transactions should be managed by a 3rd party company that collects the funds, pays the bank loan, pays the council rates, pays the water rates and pays the building insurance BEFORE the investor sees any money at all. This way the only chance the loan will fall into arrears is if the Lease Option tenant fails to make the payments.
This would be a best practice process to ensure this kind of thing does not occur.
Consumers in Rent to Own / Rent to Buy properties should insist that the Management of the payments be carried out as above as a major step to ensuring the successful outcome they seek – home ownership.
Also check out www.rent2ownvic.com for information on how your Lease Option can be better set up.