How Lease to Own Works

What is lease to own?

"Lease to own is a lease combined with an option to purchase the property for a predetermined price at the end of the lease period."

Lease to own process 

Step 1 - You fill out online application.

Step 2 - We qualify you with our mortgage broker to be sure you will be in a position to successfully purchase the home from us after the rental period.

Step 3 - You go shopping for a house.

Step 4 - You provide an initial deposit of at least 5% of the purchase price of the home.

Step 5 - Real Suite Assets investing partners will purchase the home.

Step 6 - You rent the house from us until you have enough "rent credit" plus" initial deposit" to use as your down payment to purchase the home from us.

Step 7 - You buy the home from us.

We sign two legal agreements. 

- The first is a standard "Lease Agreement" saying that you will rent the home from us, at a price that we agree on, for a period of 1-5 years.

- The second is an "Option to Purchase Agreement" stating that you have the option to purchase the home at a predetermined price when you have enough “rent credit” saved to use as your down payment for your mortgage.

Our Rent-to-Own Program requires a minimum deposit of 5% which we call “Initial Option Payment Credit”.  This goes directly towards your future purchase of the home.  To purchase the property, you will need another 5%.(This could be higher, depending on your situation)  This 5% is divided by the number of months in your Lease Agreement and added to the market rent of the property to determine your monthly cost.  The higher your initial deposit, the lower your monthly payments will be.

The way we decide on the future price is to add between 4% and 5% per year, to today's price, depending on the market. This is quite fair considering in the past, home prices have had double digit appreciation for consecutive years.  If the house is worth $300,000 today and you do a lease to own for 3 years at 4% per year the following is how we calculate the future price.

$300,000 x 1.04 x 1.04 x 1.04 = $337,459

Suppose our mortgage broker determines that you will need a 10% down payment to get a mortgage because of your past credit issues.  For the same house as above, the 10% down payment will be $33,745. If you have put down our minimum initial deposit  which is $20,000, you will still need to save another $13,745. We then divide the $13,745 by the number of months in your Lease Agreement to give us the" Monthly Option Payment Credit."We also refer to this as "Rent Credit".  This will be added to your current market rent and is non-refundable.  Basically, we let you pay your down payment one month at a time.

Example: If you do a 3 year rent to own, you pay $13,745/ 36 months = $382 per month(monthly option payment) plus your rent.  This amount can be decreased by providing a larger initial deposit, buying a less expensive home or doing a longer rent to own period.

Banks have strict lending policies that restrict many individuals from qualifying for a mortgage. But with Real Suite Assets Rent-to-Own, it’s easy to qualify.  The program is flexible and can be customized to your needs.  If you have a reasonable Initial Option Payment Credit and good income to support the additional Monthly Option Payment Credit, you should qualify.

In addition, our credit repair specialist will help you rebuild, repair or establish your credit.  They will review your credit report with you and provide you with a personalized plan for you to follow.  Our tenant/buyers love it because it gives them time to save up for a larger down payment, time to clean up past credit problems or time to sell another home.