Real Estate

Rent to own. (receive 75% rent money back and use it towards your future home_)

  • Last Updated:
  • Jul 10th, 2020 4:43 pm
[OP]
Deal Guru
User avatar
Oct 21, 2015
11839 posts
104393 upvotes
Ontario

Rent to own. (receive 75% rent money back and use it towards your future home_)

This seems too good to be true but you can check it out.

Locations = Toronto, Vancouver, and Calgary


They will pay 75% back to you as a credit and you can use that to purchase a new home from them.

For example,

$2000/month rent = $1500 back in credits.
redeemable up to 5 years

downtown location =
1 bedroom = $2200/m
2 bedroom = $4200/m
3 bedroom = $6200/m

To make it simple, I will say
1 bed = $2000 = $1500 credit per month
2 beds = $4000 = $3000 credit per month
3 beds = $6000 = $4500 credits per month



To save a bit more money, you can choose 3 bedrooms and share it with 2 other people. Don't tell them about the deal.

$4500x60months (5 years) = $270,000 credits.
Not sure if we have to buy the same apartment or can use those credits on a 1 bedroom apartment.

avg 1 bedroom in downtown = $500-$700k


edit link = https://living.westbankcorp.com/magenta-program
Last edited by Thatdealguy on Jul 9th, 2020 1:54 am, edited 1 time in total.
Costco West: BC, AB, SK & MB
Costco East: ON, Québec , NB, NS & PEI
Thread Summary
The only stipulation that matters is what the purchase price is. There’s never a free lunch. You will pay above market value guaranteed and they secure that rate for up to 5 years plus guarantee a tenant.
18 replies
Sr. Member
Oct 21, 2015
558 posts
751 upvotes
Toronto, ON
This is new and confusing. Not sure if it's a good deal, especially you can only use the credit to buy from them
[OP]
Deal Guru
User avatar
Oct 21, 2015
11839 posts
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Ontario
texasbruce wrote: This is new and confusing. Not sure if it's a good deal, especially you can only use the credit to buy from them
It is definitely a new thing "sales tactic". Not sure what happens 5 years from now. House market crash or continue to grow.
Costco West: BC, AB, SK & MB
Costco East: ON, Québec , NB, NS & PEI
Jr. Member
Jun 15, 2020
109 posts
284 upvotes
This seems like one of those deals where there are 20 unknown stipulations and conditions, with a lot of uncertainty and risk.

Hard pass.
[OP]
Deal Guru
User avatar
Oct 21, 2015
11839 posts
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Ontario
angel_wing0 wrote: This is not a hot deal, and no link reference. I will move this to the Real Estate forum.
Probably not for you but someone else might think it is.

updated with link
Costco West: BC, AB, SK & MB
Costco East: ON, Québec , NB, NS & PEI
Sr. Member
Oct 17, 2009
512 posts
467 upvotes
Depending on the terms and conditions this could be extremely extremely hot.

Bosas program is 25% of rent to a max 5% downpayment if new our hase.

If there is no cap on the downpayment percentage or length of term you can rent and continue to bank the 75% than this would be scorching hot. I'm sure it can't be that good though...

For anyone comparing to Craiglist rent to owns, those are mostly unsellable homes and they are basically charging you market rent+whatever they bank for you. Maybe they give you a slight break on the rent portion but it's nothing like this.

This is just straight market rent and you get to choose your home in presale from one of the top developers in Canada. (Unless terms limit your options, who knows at this point)

I've emailed in for the terms and conditions. This could be big
Deal Guru
Feb 22, 2011
11848 posts
15260 upvotes
Toronto
This is definitely not new and has always existed. The risk is if you can't close, or change your mind, you lose all that credit and paid higher rent for nothing. It's a win win for the seller assuming they don't need to sell.
Deal Addict
Jun 11, 2010
1485 posts
899 upvotes
ottawa
Can someone help me with the math here? 75% is an insane amount to credit back to the customer towards a home purchase. If I'm understanding this right we have apartments in Ottawa leasing for $2,500/mo, over 5 years that's $112,500. If we also sell stacked townhomes in the $200k range that's almost 50% of your home covered?? Even if you had a 2.00% mortgage rate and an original 20% downpayment over 25 years you would be breaking out around the exact same rate here.
Deal Guru
Feb 22, 2011
11848 posts
15260 upvotes
Toronto
barqers wrote: Can someone help me with the math here? 75% is an insane amount to credit back to the customer towards a home purchase. If I'm understanding this right we have apartments in Ottawa leasing for $2,500/mo, over 5 years that's $112,500. If we also sell stacked townhomes in the $200k range that's almost 50% of your home covered?? Even if you had a 2.00% mortgage rate and an original 20% downpayment over 25 years you would be breaking out around the exact same rate here.
They charge higher than market rent. This means if you can't close or change your mind you paid more for nothing, that is the risk for the renter and the offset to risk to the seller.
Sr. Member
Oct 17, 2009
512 posts
467 upvotes
You've said that twice now, where are you seeing that?

Their website shows rent for 1 bed at Vancouver house is 2000 and I'm paying 2350 for my 1 bed in that area. All the other rentals in the Vancouver area on their site that are part of the program seem to be on market as well.

They still haven't sent me their terms, do you have more info? Are they adding something to the posted prices? Cause right now this seems extremely hot

sircheersa wrote: They charge higher than market rent. This means if you can't close or change your mind you paid more for nothing, that is the risk for the renter and the offset to risk to the seller.
Deal Addict
User avatar
Mar 23, 2003
4487 posts
1157 upvotes
Hamilton
What about Toronto.
Are they going to have early pricing to lock in ?
Or do we need to wait to 2023??
Deal Addict
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Dec 13, 2016
4214 posts
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This is how it works in Thailand, so buyer beware as it may be the same type of deal.

Buy a condo for 400k

The company promises 10% annual return on rentals. Great. you make back 50% of your investment in 5 years. Yes, they will pay.

The actual market price of the condo is 200k
Deal Addict
Apr 21, 2014
2298 posts
1053 upvotes
Alberta
Thatdealguy wrote: This seems too good to be true but you can check it out.

Locations = Toronto, Vancouver, and Calgary


They will pay 75% back to you as a credit and you can use that to purchase a new home from them.

For example,

$2000/month rent = $1500 back in credits.
redeemable up to 5 years

downtown location =
1 bedroom = $2200/m
2 bedroom = $4200/m
3 bedroom = $6200/m

To make it simple, I will say
1 bed = $2000 = $1500 credit per month
2 beds = $4000 = $3000 credit per month
3 beds = $6000 = $4500 credits per month



To save a bit more money, you can choose 3 bedrooms and share it with 2 other people. Don't tell them about the deal.

$4500x60months (5 years) = $270,000 credits.
Not sure if we have to buy the same apartment or can use those credits on a 1 bedroom apartment.

avg 1 bedroom in downtown = $500-$700k


edit link = https://living.westbankcorp.com/magenta-program
The only way this would make sense for the builder is

1) they charge higher than market value rent and 75% goes to credits.

2) the price of the unit/property you will purchase from them is also above market.

So if a person doesn’t exercise the option, builder wins by getting higher than market rent. If they do exercise the option, the builder makes up the money they lost on the rental from the sale of the property.

If they are offering the unit at, market rent then the only thing I can think of is that they will inflate the price on the purchase side. So this would just be a marketing ploy to rent out their units.

If both are at fmv then I have no idea what’s going on.
Newbie
Sep 24, 2015
5 posts
1 upvote
Ontario
Rent-to-Own's can be good way to get into home ownership. I have seen this work for those who wouldn't be able to qualify to buy yet. BUT ... 75% credit towards the buy? this DEFINITELY sounds too good to be true. it's usually the opposite ratio.
Usually, you put a down payment up front (i.e. $10K, $15K ..), then you agree to the monthly rent, HOWEVER, a portion of that rent should be going toward building further to your down payment to qualify for the purchase and the agreed price when your rent-to-own term ends and you officially qualify and buy. The "rent" does tend to be higher than market rents, but that's because that portion is really going toward your future ownership ...

The risk to the tenant-buyer is that IF you change your mind about buying the house, you do lose your down payment at the beginning and throughout the term UNLESS you and the landlord/owner agrees that you would get it back ... but that's pretty rare. And even that would be a "too good to be true" situation, just like how this one sounds ... :/

I'm in investments and mortgages, if you'd like to reach out - I'd be happy to hear from you. We can look at the contract and whatever else you got. I'd hate for someone to be put in a bad position. These should be a win-win situation as with anything (I believe) in business.
Ask me about Mortgage/ R.E. Investing
Deal Expert
User avatar
Nov 28, 2013
20962 posts
10474 upvotes
Oakville
Does this company offer guaranteed rentals on investment unit purchases? I'm wondering if they're struggling to rent out units, and this is why they're offering such insane incentives in this rent-to-own offer.

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