Rent to Buy: Can Rent to Own Work For You?

Rent to Buy: Can Rent to Own Work For You?

Private Property South Africa
Private Property Reporter

Rent to buy property remains an attractive option for both prospective buyers and willing sellers.

How Does Rent to Buy Work?

As with any other contract, a rent to buy contract will be agreed upon between the landlord, the willing seller, and the tenant, the prospective buyer.

Terms the Two Parties Will Need to Agree On:

The length of the contract

The tenant will have to sign a lease, say for a year. The contract will state that he/she will have the option to buy the property when the lease expires, or even during the lease term.

The Option Fee

The tenant will have to pay a fee for the option to buy. This amount will be determined by both parties, and will be forfeited should the tenant decide not to go ahead with the purchase at the end of the contract.

READ MORE: Leasing Property With An Option to Buy

The Purchase Price

The parties will decide upfront what the purchase price will be. The risk is that big market movements may result in the landlord selling the property for much less than its actual value. If market prices are significantly lower than the agreed price, the buyer can choose to forfeit his option fee and walk away from the deal.

Rent payments

In some rent to buy contracts, landlords will agree that rent paid over the duration of the lease may be deducted from the purchase price of the home. This will give the tenant an added incentive to buy, as his rent money will not be “wasted”.


Going the rent to own route has various advantages. For the buyer, it means you can live in a property before deciding to own it. Tenants can also “tie up” a property for a specific purchase price without parting with much cash upfront. Landlords, on the other hand, can benefit as tenants are more likely to look after a property when they might own it a few months down the line.

Find rent to buy houses on Private Property. Choose from a huge variety of houses and apartments and be on your way to become a new homeowner.

Tagged In:

Rent to Buy


Found this content useful?

Get the best of Private Property's latest news and advice delivered straight to your inbox each week

Related Articles

Opportunity in a time of Covid-19
The Covid-19 pandemic has adversely affected various business sectors but has also opened up some interesting opportunities.
The Mother City’s rental market a mixed bag of tricks
The two factors currently impacting Cape Town’s rental market in many areas is not so much a shrinking tenant pool but rather an excess of stock and unrealistic pricing
Property Law - In's and Out's
We look at options available for buyers who are unable to secure bond finance, specifically Instalment Sale Agreements and Rental with an option to purchase.