www.rent2buy.ie

GettingMarried

Has anyone used www.rent2buy.ie ? It seems to be mainly developements but it does say on the FAQ Section

"You can actually buy any house through the Rent2Buy scheme as long as the owner or developer is prepared to sell through this method."

Does anyone have any experience of buying a house through this method?

It all seems a little too easy but I have read the whole site & couldn't see any catches.... There must be a catch....

Anyone have any insight into them?

Cheers

penexpers

Yes the catch is that you are agreeing a price at 2009 levels and buying in 2012 (or whenever). Who knows what house prices will be like in 2012 (they will most likely be well below what they are now).

Also, I think you only look for mortgage approval in 2012 (when you actually go to buy the house). Assuming that house prices continue to fall, you will have serious difficulty trying to get a mortgage for 2009 prices in 2012.

In short, avoid like the plague.

EKRIUQ

penexpers wrote: »

Yes the catch is that you are agreeing a price at 2009 levels and buying in 2012 (or whenever). Who knows what house prices will be like in 2012 (they will most likely be well below what they are now).

Also, I think you only look for mortgage approval in 2012 (when you actually go to buy the house). Assuming that house prices continue to fall, you will have serious difficulty trying to get a mortgage for 2009 prices in 2012.

In short, avoid like the plague.

In most of these scheme's you don't have to buy you can just walk away after 3 years if the price is too high

Compak

Penexpers is wrong. You can just walk away from the house in 2012 if the price is too high and all you lose is the standard rent which you likely would be paying anyway.

However typically how it is done is say the 2012 price is 180,000 and you agreed 250,000.
You have paid 30 grand rent in the period. So you can get the house for 220grand. Thats 40 grand too high so you jsut walk away.
However the developer is likely to compromise and sell it for perhaps 200grand. 20 grand above market but you have already paid 30 grand rent so you act get it for 10 grand less than market and both win.
This is how these schemes typically work.
If house vlue goes up you simply win

penexpers

Compak wrote: »

Penexpers is wrong. You can just walk away from the house in 2012 if the price is too high and all you lose is the standard rent which you likely would be paying anyway.

Wrong you lose 2995 + VAT, according to the website.

However typically how it is done is say the 2012 price is 180,000 and you agreed 250,000.
You have paid 30 grand rent in the period. So you can get the house for 220grand. Thats 40 grand too high so you jsut walk away.
However the developer is likely to compromise and sell it for perhaps 200grand. 20 grand above market but you have already paid 30 grand rent so you act get it for 10 grand less than market and both win.
This is how these schemes typically work.
If house vlue goes up you simply win

This won't be how they work. You sign a contract to buy the house for the set amount on the set date. This form of contract would be much easier to enforce than the standard home purchase contract, I think. There won't be any room for negotiation.

darc

From what I see, it is an excellent scheme, though many of the properties are in peripheral areas.

Works in the same way as a 3 year motor lease - you rent for 3 years & have option of buying the car for a pre agreed amount - if you don't want to buy the car you ahnd the keys back.

The €2995 + vat is obviously the operators charge, similar to an estate agents charge which is paid no matter what you decide. - this is deducted from the purchase price if you proceed with purchase, but you lose it if you don't proceed with purchase.

Personally, if the a property listed on the site suits you, then you have a lot of gain (permanent address for 3 years min, opt out clause for purchase, saving towards deposit instead of paying rent if you do purchase said property, knowlesge that any add ons you put into house stay with you). Max loss is the 2995 + VAT which is probably about 4 months rent, so not the worst situation.

For the developer, they simply recognise that the housing market has plenty of supply for the next 2 / 3 years and by having a paying tenant in a property, this will enable them to service their loans and possibly allow them build additional homes as the market recovers.

Overall a good solution to a current problem. - A good solicitor will give you a full list of advantages & dis advantages to the scheme.

penexpers

If you read the FAQ's, it seems to indicate that you lose the "deposit" built up if you walk away

What happens if I decide not to buy the house at the end of the scheme?

If you decide not to proceed with the purchase of the house then you are entitled to walk away with no further obligation. However the initial deposit and any credit built up will be forfeited.

RangeR

penexpers wrote: »

If you read the FAQ's, it seems to indicate that you lose the "deposit" built up if you walk away

This is just the "rent" paid in the three years? If that's the case, then it would have been rent money in any property.

penexpers

Reading some more, all of the rent doesn't count towards credit. Example

http://www.rent2buy.ie/developmentView.asp?id=49

Purchase Price : €265,000
Rent Per Month : €990
Credit Per Month: €450
Lease Duration : 3 years

Accumulated Rental Credit : € 16200

Also it doesn't look like any of the houses are fully furnished.

What a sham of a scheme.

Fighting Irish

Its nice that they're trying but its stupid to go near any property at the moment unless you really have to

Prices are dropping by the day

darc

penexpers wrote: »

Reading some more, all of the rent doesn't count towards credit. Example

http://www.rent2buy.ie/developmentView.asp?id=49

Purchase Price : €265,000
Rent Per Month : €990
Credit Per Month: €450
Lease Duration : 3 years

Accumulated Rental Credit : € 16200

Also it doesn't look like any of the houses are fully furnished.

What a sham of a scheme.

I've a feeling you just don't like developers or anyone who comes up witha good idea.

From what i see, they are hiding absolutely nothing. All details are provided up front in clear & plain english.

They also insist that you use your solicitor and get your own advice about the scheme.

It won't suit everybody, but its quite a good way of hedgeing your bets if the property available suits your mid term needs & if rental is the only option open to you at this time. Rents quoted seem to be the going rents for the areas listed so no rip off there. 2995 + vat fee is mentioned throughout the site, so no hiding of this either. Details of how much is contributed to deposit & how much is pure rent is also stated very clearly.

Again, I say, a good scheme if it suits you. Its a simple leagal agreemnt excecuted by your solicitor, so no hidden expense / surprise can be added.

Zynks

darc wrote: »

I've a feeling you just don't like developers or anyone who comes up witha good idea.

From what i see, they are hiding absolutely nothing. All details are provided up front in clear & plain english.

They also insist that you use your solicitor and get your own advice about the scheme.

It won't suit everybody, but its quite a good way of hedgeing your bets if the property available suits your mid term needs & if rental is the only option open to you at this time. Rents quoted seem to be the going rents for the areas listed so no rip off there. 2995 + vat fee is mentioned throughout the site, so no hiding of this either. Details of how much is contributed to deposit & how much is pure rent is also stated very clearly.

Again, I say, a good scheme if it suits you. Its a simple leagal agreemnt excecuted by your solicitor, so no hidden expense / surprise can be added.

I agree

38man

Zynks wrote: »

I agree

well seems like a good scheme definately if ya cant get morgage at present and have to pay rent anyway if you on dole say or job goes the rent allowance will pay most of your down payment
builder/land lord is carrying interest here and u get to decide wat best for u
landlord or builder would rather sell for cash and move on but when banks wont lend to ordinary punters who wants there own home its a very realistic offer to the ordinary renter and if anyone here cant see this they havent much financial capability and property is at its lowest levels now u mark my words interest at its lowest for the builder that alredy paying morgage on this property and has money off bank anyway say house
over 3% just ecb rates at 2
even they lower ecb rates bank wont pass on savings to fix it at minute was quoted 2.25+ bank rate of 1

dotsman

To me, I think it's a brilliant idea. I wish I had lived in my home for a while before I bought. Still would have bought it, but at least I would have been able to get them to fix a few small things that I didn't notice when viewing/snagging.

Also, it gives you a feel for the house/area before you commit to living there on a long-term basis. There's a lot of things you will never realise when just viewing a place such as what the neighbours are like, is the management company any good, are there pesky kids hanging around outside etc.

I suppose, it all depends on how realistic the price/rent is.

38man

dotsman wrote: »

To me, I think it's a brilliant idea. I wish I had lived in my home for a while before I bought. Still would have bought it, but at least I would have been able to get them to fix a few small things that I didn't notice when viewing/snagging.

Also, it gives you a feel for the house/area before you commit to living there on a long-term basis. There's a lot of things you will never realise when just viewing a place such as what the neighbours are like, is the management company any good, are there pesky kids hanging around outside etc.

I suppose, it all depends on how realistic the price/rent is.

well another thing is if u say house is been sold at 260000 thats the same as buying it at 220000 now because u dont have to pay interest as the land lord fixes interest and he has to pay anyway whether u re renting /to buy or leaves idle if it not sold out right
so basically wheter price goes up or down in 5 yrs u got live somewhere and landlord has to pay morgage so every one is helping other out and thats wat life about living in harmony
and i agree :Pwith dots man

dudara

You'll probably get more advice in the Accomodation and Property forum, so I'll move the thread there.

dudara

Senna

Cant believe how many people think this is a good idea. You can dismiss 'minor details' about the scheme, but it is those details that will come back to haunt you;

1. You are agreeing a price in 2009 for something you will buy in 2012 (for example), the economy is tanking and very few people are secure in their jobs. The market is going to continue to drop for this year and next, possible longer.

2. You will not be able to get a mortgage for the 2009 price, at the moment banks are rejecting valuations done only a few months ago, there is no way the 2009 valuation will be realistic in 2012. Remember prices don't have to keep dropping every year till 2012, they only have to drop a bit from today prices. Even the most bullish person knows the market will continue to drop this year and next.

3. You will be paying more rent that the equivalent house. Again rents are dropping but you will be tied into a set rent that will not be negotiable for 3 years, if your paying 10% more in rent now (than similar house), you could be paying 30% more in 2012. Remember that all current rent prices are negotiable (there plenty of choice if they wont) but it is the top rate un-negotiated rent prices that are used to set your rent.

4. You will NOT be able to negotiate the purchase price in 2012. Say you agree a price of 250k in 2009. But in 2012 the house is worth 220k (optimistic) you have 20k deposit built up through the rent, that is 20k the developer gets if you dont buy. So why would he negotiate down the price with you, when he could sell the house of 210k (10k under going price) and keep your deposit, meaning that he really got 230k for the house.

5. You will be living in this house of 3 years, you wont own it, but in you or your partners eyes its your home not a place you rent. Will you resist the urge to redecorate, improve and add extras that cant be taken with you? This will make the reality of not getting the house in 2012 a nightmare.

6. If you were buying this house now with mortgage approval, you could get a good discount off the advertised price. How much will you have to pay with this scheme? maybe a small discount off advertised. So from day one your paying more than the market price, the price a cash buyer would get it for is the Market Price, your paying a premium for being in this scheme.


Best advice is rent now, save a deposit and buy when the time is right not when some scam is up. The developers in this scheme dont really care if you buy the house at the end, you have already paid a seizable amount of their loan and got them trough the worst of the recession.

The developers who have come up with this scam must be laughing at people gullible enough to take it up. Think about it, they know they cant sell the house without dropping the prices by huge amounts, but they have loans and interest to pay. So next best thing is to get the house rented, but rent prices are dropping too. So what hair-brained scheme could they come up with that ensures they get the house rented for market (or above market) rent, that's guaranteed not to drop for 3 years (recession will last 2 at least) yes, you guessed it, rent2buy!!

If your still considering this scheme, then do a lot more research. I thought this was a good idea when i first heard about it, but after research its nothing but a scam.

jackal

In short, unless you have a feeling that house prices are set to go *up* again within the next 3 years, the negatives outweigh the positives. Rent if you want to rent, buy if you want to buy. Fair enough that you can walk away in 3 years, but why rent for a fairly hefty amount in a outlying or substandard area when you could rent close to work/town etc for the same or less.

In my opinion, the chances of house prices rising in 3 years are tiny. Therefore in 3 years you will simply not get mortgage approval to pay, say, 300k for a house thats worth 200k.

All you are doing is helping desperate developers service their enormous loans for the next few years while living in a ghost estate. "Locking into" a 2008 price is doing you no favors.

Cork Exile

Senna wrote: »

C
4. You will NOT be able to negotiate the purchase price in 2012. Say you agree a price of 250k in 2009. But in 2012 the house is worth 220k (optimistic) you have 20k deposit built up through the rent, that is 20k the developer gets if you dont buy. So why would he negotiate down the price with you, when he could sell the house of 210k (10k under going price) and keep your deposit, meaning that he really got 230k for the house.

This is the hinge point for me. There are differences between each rent2buy development I've seen so far, but some of them are factoring in if the value of the property drops in with the 3 years. For example Heuston South Quarter launched their rent2buy today and have a discount of 10% off todays price if the price drops in the meantime. Over the coming months I think we're going to see that discount increase and some more FTB friendly terms and conditions.

I take your point concerning above market rents but as long as you take the house at the end of the period and if you have a market review of the price at that time then surely that is better than paying 3 years rent to someone else. I have also seen clauses about selling on your deposit - getting another buyer to take your place.

I don't believe this is the major scam its being made out to be. There are some developers out there that will try to take advantage of this but most people will be wise enough to look around at similar schemes and realise they are being had.
Its an original idea by the construction industry and ran properly it will benefit FTB's that have trouble getting a deposit together.

Macha

Cork Exile wrote: »

I take your point concerning above market rents but as long as you take the house at the end of the period and if you have a market review of the price at that time then surely that is better than paying 3 years rent to someone else. I have also seen clauses about selling on your deposit - getting another buyer to take your place.

I think we really need to get away from this idea that rent is always dead money. It clouds people judgement. You have to look at the figures, not just say "surely" this or "surely" that.

Cork Exile wrote: »

I don't believe this is the major scam its being made out to be. There are some developers out there that will try to take advantage of this but most people will be wise enough to look around at similar schemes and realise they are being had.

Not judging from the responses of some people on this thread..

Cork Exile wrote: »

Its an original idea by the construction industry and ran properly it will benefit FTB's that have trouble getting a deposit together.

Why is everyone so desperate to help FTBs? The best thing for helping FTBs is leaving the market alone so that prices drop to a reasonable level.

And it isn't an original idea - it's been done in other places before and smacks of desperation - as if the construction industry hasn't been on the receiving end of enough bail-outs recently.

ntlbell

Cork Exile wrote: »

Its an original idea by the construction industry and ran properly it will benefit FTB's that have trouble getting a deposit together.

If they're having trouble getting a deposit together they're not doing enough to take advantage of dropping rents keeping within their means and probably can't afford the house in the first place.

herbie_gump

Senna wrote: »

4. You will NOT be able to negotiate the purchase price in 2012. Say you agree a price of 250k in 2009. But in 2012 the house is worth 220k (optimistic) you have 20k deposit built up through the rent, that is 20k the developer gets if you dont buy. So why would he negotiate down the price with you, when he could sell the house of 210k (10k under going price) and keep your deposit, meaning that he really got 230k for the house.

In the donegal version (www.fasre.org) u agree a price now, say 220k, u rent for 2 years, after ur term is up u get the house re-evaluated, if they tell the price of the house has increased, u still pay 220k if the house has dropped in price then u pay the new price.

mrgaa1

http://tinyurl.com/kwgfvb heres another rent to buy I've seen advertised

Senna

herbie_gump wrote: »

In the donegal version (www.fasre.org) u agree a price now, say 220k, u rent for 2 years, after ur term is up u get the house re-evaluated

And who does this re-evaluation? someone you pick?? no, more likely its the EA who works for the developer or someone just as bias (but not as obvious). Do you think it will favor you? not a chance. And i'm sure they were very quick to tell you if the price goes up, you still get the same great deal:rolleyes:

We have no information on house prices, unlike most other countries, so who can argue when the evaluation come back the same (or higher). At the moment there are still houses advertised at the 2006 level, in 2011, there will still be sellers just as delusional, the valuer can just point at some of these for justification. What recourse have you got? none.

Go for these scams if you want, but dont come running back in a few years when you realize how you have wasted time, energy and premium rent costs on a scheme that will lead no-where.

skippy09

I have done the rent to buy and i have had no problems with it at all, this was the only option to suit me at the moment and i have found it great. I can still walk away after three years, granted i will lose €10,000 of a deposit if i do walk away but that's the risk that i have choosen to take. Everything went through my solicitor and the developer solicitors and the contracts were all signed off with my solicitors. This is not a scam, it suits some people and doesn't suit others. Everyone to their own.....

Senna

skippy09 wrote: »

I have done the rent to buy and i have had no problems with it at all, this was the only option to suit me at the moment and i have found it great. I can still walk away after three years, granted i will lose €10,000 of a deposit if i do walk away but that's the risk that i have choosen to take. Everything went through my solicitor and the developer solicitors and the contracts were all signed off with my solicitors. This is not a scam, it suits some people and doesn't suit others. Everyone to their own.....

Its nothing to do with "suits some people", from the basic details the scheme sounds great, and in an stable market it would work very well for the average person, it would benefit them hugely and have less benefits for the builder/developer, thats why it wasn't around during the bubble (that should ring the first alarm bell in your head).
We are not in a stable market, selling or rental. The current market makes any agreements for the future purchasing price AND 2/3 fixed rental price complete madness.

skippy09

It has everything to do with suiting me, i am a 30 yr old single mother working to the bone to try and bring my 6 year old daughter up in a stable environment. I cannot get a mortgage without a deposit, i don't have other resources to come up with a deposit. Yes the market is unstable at the moment and i am taking a risk, but it is a risk well worth it in my eyes to be able to stand on my own two feet whilst putting a roof over my daughters head!!! The only thing i have to lose here is if the the price of my house goes up in 3 years and at that stage i can still walk away with just the loss of the deposit that i never would have been able to save anyway.

Senna

Best of luck, i hope it all works out for you.

ZoZo

skippy09 wrote: »

It has everything to do with suiting me, i am a 30 yr old single mother working to the bone to try and bring my 6 year old daughter up in a stable environment. I cannot get a mortgage without a deposit, i don't have other resources to come up with a deposit. Yes the market is unstable at the moment and i am taking a risk, but it is a risk well worth it in my eyes to be able to stand on my own two feet whilst putting a roof over my daughters head!!! The only thing i have to lose here is if the the price of my house goes up in 3 years and at that stage i can still walk away with just the loss of the deposit that i never would have been able to save anyway.

I agree with you skippy, I am in the exact same situation as you and I feel it is my only option. I have been renting on my own for 3 yrs now and its money down the drain. At least this way its going somewhere and I have a nestegg at the end of it. I haven't got the ball rolling on it for myself yet as I am researching it as much as possible but so far it seems to tick all the boxes for me.
I have also been speaking with a mortgageg advisor who informed me that I pay the market value of the house at the price it is today or the price it is at the end of 5 years renting....whichever is cheaper.
Can't really argue with that, can you?

skippy09

Best of luck with it ZoZo. If you do decided to go ahead with it just make sure and get a solicitor, as far as i'm aware you have to appoint a solicitor anyway to make sure everything is above board. I am having no problems so far. I have had a few issues with the house even after i got the snag done on it, but the auctioneers sent someone out straightaway that day to correct the small hic cups...

ZoZo

Thanks skippy. Here's hoping we're on the up after the few years and in a much better situation!

Fighting Irish

Senna wrote: »

Cant believe how many people think this is a good idea. You can dismiss 'minor details' about the scheme, but it is those details that will come back to haunt you;

dawt

The_Conductor

skippy09 wrote: »

It has everything to do with suiting me, i am a 30 yr old single mother working to the bone to try and bring my 6 year old daughter up in a stable environment. I cannot get a mortgage without a deposit, i don't have other resources to come up with a deposit. Yes the market is unstable at the moment and i am taking a risk, but it is a risk well worth it in my eyes to be able to stand on my own two feet whilst putting a roof over my daughters head!!! The only thing i have to lose here is if the the price of my house goes up in 3 years and at that stage i can still walk away with just the loss of the deposit that i never would have been able to save anyway.

Skippy09- while I appreciate fully what you're saying- and stability is a massive thing in a young child's life- you're really not acting in a rational manner if you don't study the implications of the various possible scenarios......

1. Both rents and property prices are still falling. You are tying yourself into paying what was originally above market rent, but now considerably above market rent, for a 3 year period.

2. While your 'rent' may be a deposit- its wholly irrelevant if the depreciation of the property is greater than the gross rent paid. I don't have a crystal ball- but I do have figures for property falls since August 2006. If you extrapolate from elsewhere (and the Irish problem is a lot worse than elsewhere), residential property prices are likely to fall by over 60% from their peak values. At peak values- rental yields averaged ~4.2%. Normalisation of rental yields would be around 7%. Allowing for the fall in property values- rents should also fall- but by a much smaller 15-20%

3. You normally have to source your mortgage on the open market at the end of the 3 year period. Can you point me at a single mortgage providor who would accept the agreed price you signed a contract for today- at market prices from 3 years hence? Further- even allowing for the fact that some schemes such as Heuston South Quarter are offering a 10% discount if prices continue to fall (which they are)- this 'discount' is very possible only a fraction of the potential downside in property prices. You are still going to have to get a valid valuation for the o/s amount due on the agreed sale price.

4. You say the only thing you are loosing if you decide to walk away at the end of the day is the 'deposit' that you would never have been able to save. That deposit- is in fact, an elevated 'rent'- over and above the going market rate for renting the property. Have a look at Heuston South Quarter- and compare the open market rent (Daft.ie) with the going rent-to-buy rent- and you'll be shocked. It can in some cases be as much as 30-40% more than the open market rent. This is what you are loosing, if you choose to walk away- you could have simply rented the property on the open market for the intervening period- at a far lower rate.

5. I do appreciate that having a child changes your priorities- but if you're working fulltime, and are desperate to have a roof over your head- surely you owe it to yourself more than ever to evaluate what you're tying yourself into? When you are making what is probably the largest financial decision of your life- you need to detach yourself from the emotions of the situation. I am not suggesting that its all clouds on the horizon- I am stating that contrary to the saying- not all clouds have silver linings- and with this scheme- the only silver lining is for the developers who are leveraging their properties to provide themselves with cashflow. Its very clever of them- and very impressive that they're not being questioned over it more. Whoever decided to come up with the scheme was incredibly astute.

Lollymcd

Nearly went for this scheme in May 2008, just wondering how people have gotton on and what the market value of the apartments are now. Is the complex still a building site? Have they filled any of the retail units? I think I heard Superquinn was supposed to go into one. I must take a trip out there...

Oliver1985

Lollymcd wrote: »

Nearly went for this scheme in May 2008, just wondering how people have gotton on and what the market value of the apartments are now. Is the complex still a building site? Have they filled any of the retail units? I think I heard Superquinn was supposed to go into one. I must take a trip out there...

A friend of mine got tied into this year and half ago price fixed at 270k for a 2 bed!!
Same apartments going for 175k now!
I looked at it but didnt go through with it!!

Whick estate are you talking about Hsq?

Lollymcd

Oliver1985 wrote: »

A friend of mine got tied into this year and half ago price fixed at 270k for a 2 bed!!
Same apartments going for 175k now!
I looked at it but didnt go through with it!!

Whick estate are you talking about Hsq?

Yes, HSQ, we looked at two apartments one in the same building as the show apartment and one that looked towards the Phoenix Park over a HUGE crater which was going to be another block but the foreman said was on hold, that was in 08.

Oliver1985

Yeah the prices there where crazy and people would really struggle to gets funds to buy !!

I read in the paper there last week that superquinn are starting to fit out!!

Lollymcd

Oliver1985 wrote: »

Yeah the prices there where crazy and people would really struggle to gets funds to buy !!

I read in the paper there last week that superquinn are starting to fit out!!

That's cool, I thought it was just a ploy to get folks moved in!!!

Oliver1985

Lollymcd wrote: »

That's cool, I thought it was just a ploy to get folks moved in!!!

Yeah you would not know!! Superquinn put there names down for units in Hsq and in clongriffin!! Still not word on the clongriffin one!!

Lollymcd

Totally wrong forum to post this in but seen as how you've heard about Superquinn in HSQ and Clongriffin have you heard if the retail units in Spencer Dock are due to be filled? So desolate

Oliver1985

Lollymcd wrote: »

Totally wrong forum to post this in but seen as how you've heard about Superquinn in HSQ and Clongriffin have you heard if the retail units in Spencer Dock are due to be filled? So desolate

No idea !!! One thing you could do is look at planning apps on dublin city council you might see some recent ones!!