Real Estate Investor Magazine South Africa Dec/January 2020 | Page 30

GETTING STARTED
Rent-to-buy
A finance solution for your first property
AMY STEADMAN
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Investors eBook
I
t’s getting increasingly harder for upcoming homebuyers
to enter the property market throughout South Africa.
Rent2buy finance is a useful solution for a homebuyer who
is almost ready for a home loan to purchase their property.
The pilot project was launched in 2017 and applies to Cape
Town Metropole, Bloemfontein and Gauteng regions. (Within
the price range of R400 000 – R1,8 Million). The benefit is that
the purchase price will remain the same for 2 years to give a
Rent2buy buyer the time to get his or her “bucks in a row” and
credit approval resolved to apply for a normal home loan.
Rent2buy purchases the property on behalf of the home
buyer and keeps it for 24 months with a price “freeze”. Just before
the 24-month R2B term expires, the purchaser has three options:
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DECEMBER/JANUARY 2020 SA Real Estate Investor Magazine

Convert the rental into an instalment towards the sale
and pay off the purchase +/- 15 years later.
Apply for a home loan and take transfer as soon as the
home loan is approved.
Sell the property and retain the profit.
Deposit requirements:
When buying from a private seller the deposit
required would be between 5.5% and 7%
3-5% deposit from a property developer
20% for a foreign buyer
Rent2Buy finance may be a solution if your bank
demands a large deposit for a home-loan.