What is the rent to own schemes?

Rent to own schemes are a type of agreement that allows a tenant to rent a property with the option to purchase the property at a later date. This type of agreement is typically used when a tenant doesn't have the funds to purchase the property outright, but would like to eventually own the property. Under a rent to own scheme, the tenant pays a regular rental payment to the landlord, as well as an additional payment towards the eventual purchase of the property. This additional payment is often referred to as a ‘rent credit’ and is usually equivalent to a percentage of the rental payment. At the end of the agreed rental period, the tenant has the option to purchase the property, using the rent credit as part of the purchase price. Rent to own schemes can be beneficial for both landlords and tenants. For landlords, they provide a steady income stream and the security of knowing that the tenant is likely to purchase the property at the end of the rental period. For tenants, they provide an opportunity to purchase a property without having to save a large deposit, as well as the flexibility of being able to move out of the property if their circumstances change. It is important to note that rent to own schemes are not regulated by the Australian government, so it is important to ensure that both the landlord and tenant understand the terms of the agreement and are aware of their rights and obligations. It is also important to seek professional advice from a qualified mortgage broker or lawyer to ensure that the agreement is fair and legally binding.