Rent to Own Goes International – New Zealand
Real estate and owning property while it varies greatly across the globe generally operates under the same principles. Today I would like to illustrate that point by examining a fascinating development in the island country of New Zealand which is over 8,000 miles from the United States. They have proposed a rent to own program in order to help out families having problems buying a home with traditional measures, much like the sellers here on our site.
The Green Party of New Zealand has a big concern with making housing affordable and also increasing home ownership. In order to fix this problem they are attempting to adopt a rent to own plan in which the government would build 100,000 homes over the next decade specifically for low income families. Instead of a direct purchase the buyers would rent these houses at a rate that breaks even on the Government’s build cost, with the added flexibility to pay a variable premium towards the house’s equity. Once they have gained enough equity in the property to qualify for a traditional mortgage they are allowed to purchase. In addition the buyers, if financial conditions deteriorate, are allowed to just rent the property without the variable premium. In theory this is the same practice here in the United States but instead of the government it is backed by current home owners and builders.
While the circumstances differ between abroad and the U.S I wanted to bring this international story to light to show that rent to own is growing, feasible, and also so that people understand that rent to own at it’s core is really about people helping people achieve the goal of affordable home ownership.
Source (The Dominion Post )