When you have settled in a stable job and have a good income and have been maintaining an impeccable credit history and homeownership is your next goal, rent to own is a program to rent then buy your home. This program suits people who can qualify for a bank loan for buying a home but do not have enough savings to make the down payment which is often around 20 percent of the property value.  In essence rent-to-own lets you rent your house while you can make payments for its purchase at a later date for a price agreed upon mutually.  This program is also known as rent try buy. This method of home purchase is popular in Australia among home buyers for long as it helps people to own homes especially when the home prices are spiralling upwards.  

This program does not involve a bank and the deal is between the seller and the buyer only. There are many flexible options to rent then buy your home. The rent to own programs suit those who are self employed with no proof to show of their income, those who have just become Australian citizens, those who do not have a good savings record to qualify for a home loan from the traditional lenders and those with blemishes in their credit history.  

The rent to own agreement involves an agreement to lease the house for rent with an option to buy it at a later date.  Apart from the rent you pay an additional amount which is known as the Option fee goes towards the purchase price of the house.  You are under no obligation to buy the property if you change your mind at a later date. Once the seller and you sign the agreement and pay the option fee you can occupy the house immediately.  The option fee is not refundable if you decide not to buy the house.  The purchase price agreed will not change despite any change in the market conditions.

You sign the Tenancy agreement with the specific details of the rental process between you and the home owner and the Deed of Option which contains the specific details of the option agreement.  You have the option of buying the property at any time you become comfortable within the contract period.  In this period you can build a good credit rating and also qualify for a conventional home loan to buy the property and end the lease contract.  You should notify the house owner at least 3 months prior to the expiry of the option that you wish to proceed with the purchase of the property.  Once the purchase is over you stop paying rent.

During the lease option period, you pay the rent and option fee promptly and in time. Maintain the house in good condition.  You run the risk of forfeiting the option fee if you breach the tenancy agreement as the deed of option is automatically terminated.  You are liable to pay any cost resulting from the default. Rent then buy your home is safe a scheme for people who dream about owning a home and do not qualify for the bank loans to repair their credits while renting a home with an option to buy it