Those who are renting and struggling to save a sizeable deposit to purchase their own home will be pleased to know that, if they live in Gauteng or Cape Town, the Rent2buy Finance option is now available via their attorney, as a member of the Attorney Realtor Hub (ARH), as a means of owning their own home.

This product is available for pre-approved properties in the above-mentioned areas for homes priced between R400 000 and R1 800 000. 

Rent2buy is exactly what it says, the tenant can rent the property he wishes to buy (pre-approval of the potential buyer is necessary) and will pay an additional amount apart from his monthly rental, which will go towards his deposit.  At the end of a two-year lease period the offer to purchase comes into effect and the buyer applies for a bond on the property. During the two years he is renting, the tenant/potential buyer can work on rehabilitating his financial situation via My Bond Fitness.

With the introduction of Rent2buy Finance, financial assistance is now available for aspiring home buyers. All is required is a deposit between 3-7% (3% if you buy from a property developer that includes all transfer costs and 7% if you buy from a private individual), an acceptable credit score and affordability to match the property price. Rent2buy will help do the calculations for you and issue you with a Rent2buy Finance certificate, which is as good as turning the buyer into a cash buyer.

An additional benefit is that the price of the property is frozen for the two years while the tenant pays his instalments.  This can be a boon to buyers, particularly as both Gauteng and Cape Town properties are still increasing in value year on year (at approximate averages of 5% and 11% respectively) as well as rentals increasing year on year.

The qualified buyers’ monthly rental would be calculated as follows: the purchase price x 14.4% x 1/12. For example, on the purchase price of:

  • R1 800 000 x 14.4% = R21 600 per month (estimated);
  • R1 500 000 x 14.4% = R18 000 per month (estimated);
  • R900 000 x 14.4% = R10 800 per month (estimated);
  • R600 000 x 14.4% = R7 200 per month (estimated);
  • R400 000 x 14.4% = R4 800 per month (estimated).

The purchaser also pays the rates, taxes and levies and insurance of the property.

How does it work and how does one get started?

  1. Get pre-qualified

The purchaser must first be pre-qualified by the Rent2buy team and then will receive a certificate of affordability to go out and find his or her own property to buy – in the City of Cape Town or Gauteng approved areas. To get pre-qualified – contact Charlene Nolte Joubert at our office. We will provide all the required documentation. The fees are R750 for an individual and R850 for a couple.

  1. Find your home

Once you find the property that you want to buy, send the information to our office.

You then submit an offer to purchase, subject to a 100% bond approval. This ties the seller in to the transaction and secures the purchase price. Always refer the sale agreement to our firm Henkes Nolte-Joubert to check the sale agreement before it is finally signed. Once is it signed by the seller, then send it to charlene@henkesnoltejoubert.co.za.

  1. Consider the terms and conditions

A Rent2buy quote will then be submitted for the buyer to consider and accept.

  1. Rent2buy negotiates the deal

The Rent2buy team contacts the seller or estate agent and re-negotiates the deal, evaluates the property and takes over the purchase of the property.

  1. Valuation

The Rent2buy property finance team will review the application and do their own valuation of the property to ensure it is not overpriced.

  1. Paperwork

You will then sign a Rent2buy agreement (Rent2buy option and Rent2buy Purchase Agreement) based on the terms and conditions provided and accepted by yourself. The deposit will then be payable.

  1. Rent2buy term

The Rent2buy purchaser will then have two years to get his or her “bucks in a row” to apply for a home loan and acquire the property through the Rent2buy contract. Terms and conditions will be provided.

  1. Rent2buy personal trainer – get “bond fit”

During the Rent2buy term, the Rent2buy buyer needs to participate in the Rent2buy programme to work towards a home loan qualification with the Rent2buy Personal Trainer.

The deposit is paid on signature of the Rent2buy agreement and covers the rental deposit on the property, transfer costs, and the Option Fee (refunded back to the purchaser at the end of the Rent2buy term if all terms and condition are met but forfeited if they decide not to continue with the Rent2buy purchase and take transfer).

To subscribe and register: please email charlene@henkesnoltejoubert.co.za or for further information call 083 258 1343.