4 Benefits of Rent-to-Own Home Ownership in Canada

The Basics of Rent-to-Own

Rent-to-own home ownership has become a popular option for Canadians who want to become homeowners but face challenges such as a lack of a down payment, poor credit history, challenges with verifying income, or for new immigrants.

If you're considering rent-to-own, here are some of the basics. 

Ultimately it allows you to live in the home you eventually want to own, while giving you time to improve your financial situation. This is meant to set you up so that you can qualify for a mortgage on your own when it comes time to move from the renting to the owning part of the equation. 

And with rents in Canada continuing to climb, and home purchase prices declining, now is a great time to consider rent-to-own as an option. 

"I will forever believe that buying a home is a great investment."

- Oprah Winfrey

The 4 Big Benefits of Rent-to-Own

This type of home purchase option isn't for everyone, but it can be a great solution for a lot of people – especially those who are ready to get out of renting and are ready to take a serious path to homeownership.

Here are 4 key benefits if you're considering rent-to-own.

1. Affordability

Rent-to-own allows prospective homebuyers to live in the home they eventually want to own while also putting money towards a down payment if they choose to purchase. Future buyers can lock in a purchase price at the start of the rent-to-own agreement and make small incremental payments towards the option to purchase the home. This is an avenue to avoid high lump-sum down payment requirements. Plus, this allows future buyers to wait out the volatility of inflation and high interest rates that we're seeing in 2022-2023.

2. Credit & Financial Improvement

At Chilkoot Homes, we're passionate about financial literacy, and we want to teach people how to take control of their personal finances. We believe this is one of the greatest benefits of rent-to-own.

Rent-to-own gives future homeowners the opportunity to improve their credit score. When you become a tenant-buyer with us and you  make timely rent payments, we'll report those on-time and in-full payments to credit bureaus, helping to improve your credit score. We also work with you on a regular schedule and provide you access to our trusted network of homeownership pros to get confidential financial advice you can trust.

During the life of the rent-to-own agreement – usually 2-3 years – we work with you so you can improve your credit score and qualify for a mortgage at the best possible interest rate when it comes time to buy.

3. Flexibility & Support

Consider rent-to-own as a homeowners training bootcamp.  It's a way for you to test out homeownership and make sure it's truly something you want. But, instead of trying to navigate this all on your own, you'll have the team from Chilkoot Homes there to support you. 

It's also easy to get sucked into the emotion of buying without proper due diligence. We've seen this countless times where a person gets talked into buying a home without any conditions – not even having the chance to get a proper home inspection to see if there is an issue that could end up costing tens of thousands of dollars. Ouch.

We can't stress enough how bad of an idea this is to make what could be the largest purchase of your life, and not make sure you have so much as an inspection.  We won't let stuff like that happen. If a home is a bad investment, or the seller or real estate agent is unreasonable, we just won't buy it.

If it wouldn't be good enough for us, it shouldn't be good enough for you.

We've got your back.

4. Path to Home Ownership

Life happens. To each and every one of us.  Heck, we remember making less than ideal financial decisions when we were 18 years old. Luckily, we learnt our lessons when we were young.  Now, we want to help others either avoid those same pitfalls or give you a hand up from a tough situation life may have thrown at you. 

At the end of the day, rent-to-own is a path to homeownership. It's an opportunity to build equity in a home and eventually own a piece of property. Don't fall into the trap of pessimism, thinking homeownership could never be a potential for you.

Homeownership can be in your future. We believe it, and we hope you do too.