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 FREE DOWNLOAD First-Time 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: 28 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.