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May 17, 2019

Rent-To-Own Property In South Africa

Have you ever wanted to test drive a home to see if it suits your needs? With a rent-to-own property, you can.

What is rent-to-own?

It’s exactly what the name implies: The owner has agreed to sell the property to the tenant on the terms that they agree to a predetermined renting contact. Once this contract has been fulfilled, the purchase process will begin. The agreement could be any duration but common practice amongst owners is usually up to two years.

Why do tenants use this option?

Like a new car needs a test drive, a potential property needs one too. Tenants would usually like to determine if the property suits their lifestyle and if they can ‘picture’ themselves living in the area or property long-term. This option is more suited towards newlyweds or starter families who are testing out the waters. They’ll look at location and consider the following:


  • Is it a safe area?
  • What are the schools like in the area?
  • Are there any other young families living in the neighbourhood?
  • Which amenities are close?
  • What’s public transport like in the area?


When looking at the property itself, they consider if the size suits their family’s lifestyle. This means looking at the space (will their future kids be able to play, etc.).


Tenants also use this rent-to-own option to help save for a future bond. Renting will usually be more affordable until the purchase phase kicks in. By this time, the tenants would have saved up enough.

Why do owners use this option?

The main challenge that owners have when renting to tenants is maintenance. With a rent-to-own option, tenants are inclined to maintain the property well as it would be favourable to them when the time comes to purchase the property.


While the concept is relatively simple, the tenant and buyer needs to have an understanding of what the agreement entails. An ironclad contract needs to be put in place so all parties are in agreement with the terms and conditions. The contract needs to be easy to understand and cover everything. The lease agreement should include:


  • Duration of lease
  • If any fees are applicable to the agreement
  • Title deed once lease has ended
  • What happens if tenant doesn’t purchase the property


If you’re an owner considering this option, sitting with a lawyer is crucial.
There are many options when entering the property market as an investor – rent-to-own being one. To discover many other avenues, book your seat at our FREE property investment seminars!

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