Rent To Buy

Devil08

`Does anybody know if it is possible to renegotiate the amount of rent you pay on a rent to buy scheme? I am currently paying over 1000 a month rent on a 2 bed apartment. The prices have dropped significantly in the area since I signed the lease and similar apartments are renting at 800 per month. Has anyone any experience of renegotiating in a rent to buy scheme? If I cant get a cheaper deal ill be leaving it at end of lease..

SoupyNorman

What does it say on your contract?

Devil08

SoupyNorman wrote: »

What does it say on your contract?

my contract says its a 2 year lease, 1000 rent a month, 270,000 price to buy, can leave after year one or two...all rent goes towards buying...contracts are there to be renegotiated though ay!?

ntlbell

Devil08 wrote: »

my contract says its a 2 year lease, 1000 rent a month, 270,000 price to buy, can leave after year one or two...all rent goes towards buying...contracts are there to be renegotiated though ay!?

The whole idea for the builder is they get to keep rents high and prevent the price of the house dropping

it's basically a scam.

You can rent a lot cheaper on the open market, and as homes continue to drop you'll be able to buy a similar house a lot cheaper on the open market too.

People on this forum were warning about this a long time ago, most people ignore the advice tho.

Devil08

ntlbell wrote: »

The whole idea for the builder is they get to keep rents high and prevent the price of the house dropping

it's basically a scam.

You can rent a lot cheaper on the open market, and as homes continue to drop you'll be able to buy a similar house a lot cheaper on the open market too.

People on this forum were warning about this a long time ago, most people ignore the advice tho.

well i was more than happy to buy it at the price I initially agreed but its dropped so much that its not worth it anymore...I wouldnt say its a scam, its a great way of saving for your deposit and rent isnt dead if your planning on buying. Its the price of houses dropping thats messed it all up!

ntlbell

Devil08 wrote: »

well i was more than happy to buy it at the price I initially agreed but its dropped so much that its not worth it anymore...I wouldnt say its a scam, its a great way of saving for your deposit and rent isnt dead if your planning on buying. Its the price of houses dropping thats messed it all up!

It's a great way for builders to put in artificial floors for rent and house prices.

nothing else.

Great, one saves a deposit on a 270k house over two years and the house drops on average of 50k based on the drops over the last two years.

Sounds great, where do I sign up.

It's a scam, nothing more nothing less.

the_syco

Devil08 wrote: »

well i was more than happy to buy it at the price I initially agreed but its dropped so much that its not worth it anymore...I wouldnt say its a scam, its a great way of saving for your deposit and rent isnt dead if your planning on buying. Its the price of houses dropping thats messed it all up!

It's a scam, as you'd be buying it at the original price, and not how much it's worth now. For example: you pay €24,000 rent, and in the end, use it as a deposit for a house that you could get for €50,000 more than it's worth.

The "scheme" only came about when house prices started dropping. The scheme was not around when prices were going up, only when prices were going down.

Devil08

the_syco wrote: »

It's a scam, as you'd be buying it at the original price, and not how much it's worth now. For example: you pay €24,000 rent, and in the end, use it as a deposit for a house that you could get for €50,000 more than it's worth.

The "scheme" only came about when house prices started dropping. The scheme was not around when prices were going up, only when prices were going down.

true, but nobody in the right mind would opt to buy a house that has dropped 50 grand from the price they agreed on. I wont be anyway. Its just going to be dead rent like renting anywhere I suppose.

the_syco

Devil08 wrote: »

true, but nobody in the right mind would opt to buy a house that has dropped 50 grand from the price they agreed on. I wont be anyway. Its just going to be dead rent like renting anywhere I suppose.

How many times should I say "scam" before you understand that

Devil08 wrote: »

but nobody in the right mind would opt to buy a house that has dropped 50 grand from the price they agreed on

is the scam?

sesna

I remeber seeing rent2buy signs at Heuston Station ("Dublins South Quarter" :rolleyes: ). I decided within 30 seconds it was a builder scam.

Looks like an unfinished slum block now.

murphym7

Devil08 wrote: »

my contract says its a 2 year lease, 1000 rent a month, 270,000 price to buy, can leave after year one or two...all rent goes towards buying...contracts are there to be renegotiated though ay!?

If all your "rent" goes towards buying whats your problem?

It would be the first time I heard of a r2b scheme that 100% of the rent goes towards the purchase - its usually anything from 60 - 85%.

I fail to see your problem if 100% of yours goes towards the purchase. Also the rent of your neighbours has nothing to do with your aggreement - your money is being kept in a bank account for you should you choose to go through with the purchase - all their money is going into the landlords bank account, for good.

You would be better off trying to reduce the cost of the property rather than the amount you currenlty pay - if you reduce your monthly payments all you are doing is reducing the amount you will have avalaible at the end of the contract, does not make sense unless you reduce the cost of the property.

wyndham

Devil08 wrote: »

my contract says its a 2 year lease, 1000 rent a month, 270,000 price to buy, can leave after year one or two...all rent goes towards buying...contracts are there to be renegotiated though ay!?

Would you still be interested in the property at a lower purchase price? Maybe you could renegotiate that €270,000 downwards?

oflahero

Devil08 wrote: »

... rent isnt dead if your planning on buying. Its the price of houses dropping thats messed it all up!

I love this, only in Ireland would you find a potential house buyer complaining that prices are dropping!

sesna

The whole premise of your negotiating room with this buider is completely diminished by virtue of the fact you have a vested interest in buying the property, given that you have invested so much money in the deposit already.

It's a complete scam. Justifications of it are desperate and remind me of Berties tribunal evidence. Im out of here :pac:

Lillylilly

murphym7 wrote: »

If all your "rent" goes towards buying whats your problem?

It would be the first time I heard of a r2b scheme that 100% of the rent goes towards the purchase - its usually anything from 60 - 85%.

Most of the Rent 2 Buy schemes I've seen are 100%. I'm buying a house in two months having completed a 100% Rent 2 Buy.

Devil08

wyndham wrote: »

Would you still be interested in the property at a lower purchase price? Maybe you could renegotiate that €270,000 downwards?

well yes thats i want! and whoever says its a scam its not!! if the cost price went up you wouldnt be saying its a scam...

ntlbell

Devil08 wrote: »

well yes thats i want! and whoever says its a scam its not!! if the cost price went up you wouldnt be saying its a scam...

if the prices were going up they wouldn't be offering it!!

christ all mighty like.

johnnyskeleton

Lillylilly wrote: »

Most of the Rent 2 Buy schemes I've seen are 100%. I'm buying a house in two months having completed a 100% Rent 2 Buy.

Have you checked to see if there are any other places in the same development/area that are selling for less, particularly less than the total rent you have paid plus a bit more? If so, you could be better off not buying the one youre in and buying the other instead.

Lillylilly

johnnyskeleton wrote: »

Have you checked to see if there are any other places in the same development/area that are selling for less, particularly less than the total rent you have paid plus a bit more? If so, you could be better off not buying the one youre in and buying the other instead.

Then I would have wasted my year's rent and time and money in doing the house up.
Yeah, houses on our road are going for slightly less than we agreed to pay in the beginning, but I'm fine with that. Myself and my partner did not have a full deposit saved so in effect, our rent for the past year has been our deposit. I don't mind that costing us a bit more. We live in our own house!

I know a lot of people have reserves about the R2B thing, but it suits some people! Each to their own.

FunkyMissMonkey

Rent2Buy does offer a lot of room to negotiate the buy price of the house if it falls by the time the rental lease is up.

A bank isn't going to give you a mortgage above the current value, and the Developer knows this full well. He won't be able to sell it to anyone else at the 2-years-ago price either, so you're in a very strong position to negotiate it down.

I'm in the middle of starting my own Rent2Buy contract, and the price we've negotiated with the Developer is €20k cheaper than the exact same layout house 2 doors down, that's available on the open market.

If I were OP, I'd stick with the scheme, and negotiate hard on the final house price. If you can continue to cover the rent at the current cost, you're only going to build up a better deposit after all. Walking away now would mean you'd lose everything you'd worked for, and the house that you'd been calling yours since you moved in.

the_syco

Lillylilly wrote: »

houses on our road are going for slightly less than we agreed to pay in the beginning, but I'm fine with that.

You may be, but what about the bank?

The true face of the scam comes about when you go get a mortgage. Hopefully, the bank will give you the same amount that it said it'd give you a year ago, for the same deposit. Hopefully the house is seen to be worth as much as it did a year ago, because if not, you'll need to make up the difference, and this is where the scam comes in. The builder gets the same amount that he sold the house for, but you may need to somehow get more money than just the mortgage and the deposit, if the bank gives you less money for a mortgage.

My advice, get the mortgage, and then negotiate hard with the builder to accept that amount. The builder should know that that's the best offer they'll get.