Thursday, 28 November 2013

Retargeting

What is Retargeting?

Retargeting is the ability to serve up relevant display advertising to people who have already visited your website or landing pages.

How Retargeting works?


Placing a small piece of HTML code on the web page(s) from which you are looking to capture your retargeting audience. Whenever searchers visit one of these pages, an ad server then loads a retargeting pixel, drops a cookie onto that person’s machine and enables marketers to serve them specific display advertising wherever they may travel on the web.
Retargeting


Benefits of Retargeting

Online conversions are hard to achieve. Whether you want prospects to download a white pager or leave their contact information for a free trial, they may be not interested yet or may not have the time. By incorporating retargeting across your marketing activities, you can rest assured that people who don’t convert the first time aren’t lost forever – you can continue to keep your message in front of them until they are ready to engage with you.
Retargeting is also an effective lead nurturing approach. The essence of lead nurturing is to build strong, trusting and long term relationship with prospects, regardless of their readiness to buy. This includes staying top of mind with your brand, addressing the right questions or concerns at all stage of the buying cycle with relevant content and influencing all of the individual involved in the buying decision.
Another great thing about retargeting is that you can tailor your ads to address wherever your prospects are in the buying cycle. i.e. if a searcher has visited your home page and done nothing else, retarget them with ad creative that focuses on increasing your brand awareness and overall value proposition. However, if a searcher has visited specific product pages, it would be more effective to retarget them with ad creative that addresses the particular features and competitive advantages of your products.
Retargeting also gives you a second, third and fourth… chance to make a first impression. It’s not easy to convince prospects when they first hit one of your web pages that you’re the solution for them.

Saturday, 16 November 2013

Feeling stuck at work?


Do you think it’s tough to tell your boss that you have more on your plate than you can do without feeling like a whiner?  Do you think It’s tough to speak up when your boss overtly or subtly make it clear that he or she does not appreciate your speaking up?
Feeling stuck at work
Influencing or motivating upward is a very tough challenge. Here is some advice I learned:

1.       Make it safe.

Start by asking yourself, “Why would a reasonable and rational person like your boss act this way?” Why is he/she not encouraging others to speak up? What would make it safe enough for your boss to have this conversation? Make sure that you clarify Mutual Purpose and are prepared to be very respectful when you bring up the issue. You want to make sure you across as curious and helpful rather than frustrated and judgmental. Also, don’t speculate and focus on the possible negative outcomes. We often exaggerate possible negative consequences and underplay the positives. That strategy causes us to vote for staying silent – thus voting for the status quo.

Before you open your mouth, mastering your clever stories and getting your motives and emotions right. Your boss will sense the clue from your body language before you even start talking. On the other hand, privacy makes the conversation safer. You don’t want an audience. You also want to choose a good time. Find when your boss is more receptive and has fewer work demands or stresses during a day or a week. When you talk, start with an observation and question, not a conclusion and emotion.  In your conversation, you want to honestly and empathically understand the reasons and jointly seek solutions.

2.       Talk about the real issue.

 In tough situations, we are often tempted to bring up a simple, easy topic and not the real one. In this particular case, the easy issue is that you made a suggestion and it wasn’t passed on. The real issue is that your boss has a pattern of not passing on ideas and that means that you and your colleagues face the same problems at work week after week. As part of your preparation, you’ll want to do a consequence search. What are the consequences of the boss’s behavior? Who is being impacted? When you find the consequences, you are prepared to talk about the tougher issue.
What if it doesn’t go well with your boss? There are two possible backup plans you might consider:

  • Share your intentions and excuse yourself. Tell your boss that you brought up this topic to improve the results and teamwork in the company and that you didn’t intend to cause him/her any stress. Express thanks for his/her time and find a way to leave.
  • Suggest a team approach. If appropriate, you might propose that the improvement   program can be done by members of the team.
For either of these plans, you need to assess what is happening in the moment and what might be the best next step. The point here is that you’ve anticipated some next steps, so when one option ends, you have a way forward. Preparation and sound anticipation improve confidence.
Speaking up to your boss can be tough. Yet I remind you that if you don’t speak up, you are voting for the status quo. Also, if you gossip or speak up in a frustrated, angry or judgmental way, you’ve diminished the relationship. Either way, you have become part of the problem. On the other hand, if you can speak up in a safe, considered and planned way, you are much more likely to solve the problem and build the relationship.

Wednesday, 13 November 2013

When is the best time to sell /buy a house in Toronto?


We all want to sell our house as high as possible. The question we may have in our mind is when the best time is to sell a house.  According to the Toronto Real Estate Board, the best time to sell is spring. It’s a time of renewal and change in general. From a buyer’s perspective, buying in the spring allows for a closing date early in the summertime, aligning with school and work breaks that make moving relatively easier.  


Best time to sell/buy a house


However, since the housing price in Toronto continued to increase over the past few years, you might already run into bidding wars and did not get your dream house due to high pricing in the spring market. Then, how about sell your house at off-peak season, let’s say in the wintertime.  As a seller, you may not sell your house for maximum $$$ you can get in the spring. But you probably can secure a good deal to buy your new house after you sell your current one in most cases.  There is a $35,000 price difference to buy a house in off-peak season on average.
The ideal case is that if you can buy your next house in the wintertime for a relatively lower price and set the closing date a little further out. Then start to sell your current house in the spring for maximum $$$. However, if you choose to purchase your new house before you sell your current one, make sure you consult with your bank or mortgage broker in advance as you might need an escape clause.  There are three mortgage options available in the market:
1.       Portable mortgage: transfer your existing fixed mortgage rate, loan balance and maturity date to your new mortgage.
2.       Assumable mortgage: an assumable mortgage makes your home more attractive to potential buyers by having them take over your mortgage and its existing rate. BMO Bank of Montreal can release you from any personal liability if your buyer meets BMO’s usual credit requirements and if your lawyer has completed the necessary paperwork.
3.       Bridge financing: the option can make sure that you have the funds to cover the cost of two mortgages when your closing dates don’t coincide. However, you need a lot of $$$ to pull that off because bridge financing at the bank is difficult to obtain without a buyer commitment for your existing home.  The banks will offer bridge financing about 2 percentage points above prime if the closing date for the sale of your house comes after your purchase date, but you have to have a committed buyer.

On the other hand, you have to prepare additional $$$ for the closing cost of your new house and/or when you need to carry both properties before you sell your current one.
If you choose to sell first, it comes with the risk of not finding something in the right neighborhood. The reality is no matter you choose when to sell/buy a house or whether you want to sell the current one first or buy a new one first, it always comes with pros and cons for each choice.
To sum up, it’s up to you to decide when is the good time to sell the house taken into account of your situations.



Thursday, 7 November 2013

How to Negotiate Price When Renting

Don’t forget always negotiate price when renting. However, the amount of leverage you will have depend on the amount of time the rental property has been on the market, whether you are a desirable renter with good credit and excellent references, what similar property are renting for in the neighbourhood and your competition – people who are also interested in the same property.


Here are some suggestions when you negotiate price:

Do your research


Make sure you know the average rents for in the neighborhood and city where you are looking to rent. You can review classified ads on major websites and have a general idea on how much is being paid in this area.
Find out how long the rental property you want has been on the market. If it has not rented after 8 weeks of availability, the landlord will be about losing money and might be more willing to negotiate your rent.

Sell yourself as a renter


Prove that you are a great tenant compared with other people who are also interested in the property.
Bring references, the most recent pay stubs, bank balances and credit reports if you have when you meet with the landlord. It will facilitate the process of background check, credit check and employment verification and give you a big edge over other competition.

Remember you have options

Let the landlord know that you are considering other places with lower rents. You might have an extra bargaining chip.

Demonstrate flexibility

If there is no room for negotiation on the amount of rent, ask for other considerations. For example, ask whether utilities can be included, see if you can pay a lower security deposit, get an extra parking space or free cable.

Consider your timing

Start to look for a rental place at least 2 or 3 months before your current lease expires. Try to avoid rent in peak seasons i.e. it’s less likely to negotiate rent on a property in a university town in August.

Offer to sign a longer lease in exchange for a lower rent

 It costs landlords money every time a tenant moves out and a new one moves in. If you offer to sign a 3-year lease, the landlord might be comfortable enough to lower rent.

Wednesday, 6 November 2013

Are you ready to be a landlord?


Consider the following five steps to decide whether you are ready to become a landlord:



Understand the Responsibility Involved


First, you must determine whether being a landlord is an obligation you can even handle. The benefits of renting are numerous, such as the ability to generate passive income that covers the expenses and possibly even create a positive cash flow, the ease of tax breaks and the ability to deter the vandalism that often plagues an empty home.

However, being a landlord may not be as smooth as you expected. You need to stay on top repairs and maintenance, collect rent and potentially deal with problem tenants.

Prepare your home


Second, you need to prepare for the new tenant by thoroughly cleaning your home and making sure any appliances are working and are in good condition.

If you've decided that you are renting out a room or area within your house, make sure that you can secure that area from the rest of your home.
The next step is to write ads describe your property features that will “sell” and post it on major websites. Moreover, you need to consider the timing for rent. In general, Renters move in particular seasons; March, April, May, June, July and August are typically been the best times to locate a tenant. It is also necessary to make sure you have enough money to cover all the expenses during the period of vacancy. Normally it takes 6-8 weeks to rent out your house.

Hire professionals


It’s important to hire lawyers to draft a lease agreement making sure that it follows local laws.Furthermore, you need to work with a mortgage broker to check out renter’s credit history.You also need to find out which expenses is tax deductible.
In case of any incurred landlord-tenant issues, you may seek legal assistance to protect your rights. For more information, please check the Landlord and Tenant Board Ontario website.

Set a Competitive Price

Do a research to know the average renting price in your neighborhood and the conditions of those rental properties. Then set rent at a competitive price and make sure you highlight all the most valuable aspects of your home.

Select tenants carefully


Remember, you need to choose your tenants very, very carefully. Always check tenant’s credit history and ask tenants to provide the proof such as two most recent pay stubs, an employment letter and their previous landlord contact info.  Plus, trust your gut feeling to find tenants who will not only pay the rent on time but also maintain your house in good condition.
Once you’ve found a right tenant, ask for a reasonable security deposit (usually it’s the amount of the first and last month rent) and arrange a payment schedule.
In general, tenants will cover all utilities i.e. water, electricity, gas and water heater rental. You may choose to transfer the utility in tenant’s name. However, if your tenant fails to pay the bills, the unpaid amount will reflect on your property tax. On the other hand, you can still keep the utility in your name and collect the amount when you receive the bills.

Tuesday, 5 November 2013

Real Estate Investing in Hamilton, Ontario

Hamilton is a city of 500,000 people and now has a very diverse economy. With plenty of transitioning areas, a proactive economic development office and many transportation changes there are great ways to position yourself and profit as a real estate investor.

New Home market: Total Housing Starts to Rebound


Improving economic conditions and steady in-migration of homebuyers from the Greater Toronto Area (GTA) will support residential construction in Hamilton. In addition, housing starts should benefit from existing home sales, which have been gaining momentum since April 2013.
During the past two census periods, approximately 4,300 people every year have been added to the Hamilton population from net migration. Nearly half of these migrants came from within Ontario. The steady annual population increases have generated more households, which bode well for housing starts in the next two years.

Rental Market: Vacancy Rate to Decline Slightly


In 2014, the average rental apartment vacancy rate in Hamilton is anticipated to decrease to three per cent. International migration has historically been a strong driver of population growth in the Hamilton area. Given that immigrants tend to lack the credit history and savings to jump into homeownership, they typically move into rental accommodation upon arriving in Canada. This phenomenon tends to put downward pressure on apartment vacancy rates in Hamilton.
In addition, Hamilton’s rental market will be supported by young adults leaving their parental homes. These young adults typically opt for less expensive rental accommodation.
Hamilton Real Estate Hotspot – Southeast Mountain



This area (Southeast) is helping Hamilton set another year of Record residential and commercial permits.

The outer Southeast is being newly developed with significant growth. New housing, serviced lots, big box stores and commercial centers are expanding the residential and commercial footprint of Hamilton.
For more information, please check the Canada Mortgage and Housing Corporation website.

Saturday, 2 November 2013

人生,起伏,反弹

有一位老人,他的名字叫褚时健。 

 
生于1928年的褚时健出生在一个农民的家庭。1955年27岁的褚时健担任了云南玉溪地区行署人事科科长。 31岁时被打成右派,带着妻子和唯一的女儿下农场参加劳动改造。

文革结束后,1979年褚时健接手玉溪卷烟厂,出任厂长。当时的玉溪卷烟厂是一家濒临倒闭的破烂小厂。那年他51岁!扛下了这份重任。 思考: 而我们现在有很多2、30岁的人已经不想工作,害怕压力、害怕承担、怕苦怕累。到40岁已经觉得这一生的奋斗结束了。褚时健的奋斗故事51岁才刚刚开始。

经过褚时健和他的团队经过18年的努力,把当年濒临倒闭的玉溪卷烟厂打造成后来亚洲最大的卷烟厂,中国的名牌企业:红塔山集团。褚时健也成为中国烟草大王。成为了地方财政的支柱,18年的时间共为国家创税收991亿。

而就在褚时健红透全中国,走到人生巅峰时,在1999年因为经济问题被判无期徒刑(后来改判有期徒刑17年),那年的褚时健已经71岁。当从一个红透半边天的国企红人,执政了18年的红塔集团的全国风云人物一下子变成阶下囚,这个人生的打击可以说是灭顶之灾。

接下来的打击对一个老人才是致命的,妻子和女儿早在三年前已经先行入狱,唯一的女儿在狱中自杀身亡。

这场人生的游戏是何等的残酷,一般人想到的:此时这位风烛残年的老人在晚年遇到这样的不幸,只能在狱中悲凉的苟延残喘度过余生了。

三年后,褚时健因为严重的糖尿病,在狱中几次晕倒,后被保外就医。经过几个月的调理后,褚时健上了哀劳山种田,后来他承包了2400亩的荒地种橙子。那年他74岁。

王石感慨地说:我得知他保外就医后,就专程到云南山区探访他。他居然承包了2400亩山地种橙子,橙子挂果要6年,他那时已经是75岁的老人了,你想像一下,一个75岁的老人,戴着一个大墨镜,穿着破圆领衫,兴致勃勃地跟我谈论橙子6年后挂果是什么情景。所以王石说:人生最大的震憾在哀劳山上!是穿着破圆领衫,戴着大墨镜,戴着草帽,兴致勃勃的谈论6年后橙子挂果的75岁褚时健。6年后,他已经是81岁的高龄。

后来有人问深圳万科集团董事长王石:你最尊敬的企业家是谁?王石沉吟了一下,说出了一个人的名字。不是全球巨富巴菲特、比尔.盖茨或李嘉诚,也不是房地产界的某位成功人士,而是一个老人,一个跌倒过并且跌得很惨的人。

这些看起来无法跨越的困难并没有阻挡褚时健,他带着妻子进驻荒山,昔日的企业家成为一个地道的农民。几年的时间,他用努力和汗水把荒山变成果园,而且他种的冰糖脐橙在云南1公斤8块钱你都买不到,原来这些产品一采摘就运往深圳、北京、上海等大城市,效益惊人。因为褚时健卖的是励志橙。

王石再去探望褚时健时,他看到了一个面色黝黑但健康开朗的农民老伯伯。他向王石介绍的都是果园、气温、果苗的长势。言谈之间,他自然地谈到了一个核心的问题:2400亩的荒山如何管理? 他使用了以前的方法,采用和果农互利的办法。他给每棵树都定了标准,产量上他定个数,说收多少果子就收多少,因为太多会影响果子的质量。这样一来,果农一见到差点儿的果子就主动摘掉,从不以次充好。他制定了激励机制:一个农民只要任务完成,就能领上4000块钱,年终奖金2000多块,一个农民一年能领到一万多块钱,一户三个人,就能收入三四万块钱,比到外面打工挣钱还多。

他管理烟厂时,想到烟厂上班的人挤破头;现在管理果园,想到果园干活的人也挤破头。这个已经85岁的老人,把跌倒当成了爬起,面对人生的波澜,他流过泪,也曾黯然神伤。

现今,经过评估,褚时健的身家又已过亿。

他的那种面对任何人生的磨难所展示出来的淡定,让他作为企业家的气质和胸怀呼之欲出。王石说:如果我在他那个年纪遇到挫折,我一定不会像他那样,而是在一个岛上,远离城市,离群独居。

王石的感慨,褚时健并没有听到。他在红塔集团时带的三个徒弟,现在已是红河烟厂、曲靖烟厂、云南中烟集团的掌门人,对他来说,他在曾经最辉煌时跌倒,但在跌倒后又一次创造神话,这就足够了。

褚时健这个最富争议的人物,给了我们一个答案衡量一个人成功的标志。不是看他登到顶峰的高度,而是看他跌到低谷的反弹力——巴顿将军!

未来的路上,不管遇到多大的困难,请想想这位老人,记住他的31岁、51岁、71岁、75岁、85岁....

最后一句话送给所有的朋友:抓住机遇!活在希望里 。

Wednesday, 30 October 2013

What do I need to apply for Rent to Own program?

To apply for the Rent to Own program, you need to provide the following documents:

Rent to Own home FAQ
1.       A copy of your valid ID, i.e. driver’s license.

2.       Notice of Assessment in the last 2 years.

3.       Your home address for the last 3 years, name and phone number of your landlords in the last 3 years.

4.       Additional information such as your current monthly expenses including rent, outstanding loans, credit card .etc so that we can calculate the maximum house price that you can qualify for.

Once we collect all the information, you need to go through a credit check. If qualified, you will sign a Lease agreement with the landlord to Rent-to-Own the home for a term. Generally speaking, the term depends on how long you need to repair or build your credit and accumulate a minimum of 10% down payment at the end of the lease term. 

You will pay a monthly rent + option premium which goes towards your down payment. This amount varies dependent on the amount of the initial deposit you provide. Your goal is to accumulate 10% of down payment at the end of the term. For example, if the house worth $300,000, you have $6,000 deposit (2% of the home price). During the term, let’s say in 3 years, if you set aside a $300 as option premium per month, you will accumulate $10,800 at the end of the term. Your available down payment equals to $16,800 (initial deposit+ 36 months option premium), 5.6% of the home price in total.  


Tuesday, 29 October 2013

Rent, buy or Rent to Own your home

In the market today, there are flexible options about your home. Shall we rent, buy or Rent to Own our home? Well, It all depends on your own situation.




Rent


Everybody may have heard this before: if you’re paying monthly rent, as opposed to a monthly mortgage, you are essentially throwing your money away. However, in many situations, to rent a home is much more advantageous than own one.
1.       You don’t have to come up with the thousands of dollars in down payments, closing costs and fees such as housing inspections, legal counsel, land transfer taxes and insurance. Not to mention your monthly mortgage payment. Most mortgage payments are applied a large portion to the interest, not the capital. This is money that you won’t get back when you sell your home.

2.       You can’t always rely on getting a big tax break which is supposed to be one of the greatest advantages of owning a home. If your annual mortgage interest payment, plus any other deductions you are entitled to, isn’t greater than standard tax reductions, you will not receive any tax benefit from owning a house. However, if you rent a home, you’ll always receive some sort of tax relief, as a large portion of your rent is tax deductible every year.

3.       The enormous amount of flexibility that renting provides cannot be overlooked. You can pack up and leave immediately at the end of the lease. You don’t need to worry about waiting to sell and housing market recession.

4.       If by any chance you face financial difficulties, the financial devastation that comes with losing your home is far greater than being evicted from your apartment.

Buy


Are you ready to buy a house?
1.       Find out whether you have a budget to cover all home related costs, i.e.  Mortgage, utilities and maintenance.

2.       Whether you have a sizable down payment.  To get your foot in the door, you’ll need a down payment worth 20% of the home price. That means for a $500K home, you’ll need $100,000 upfront.  You may get lower low-down loans, but those options will cost you extra and normally come with higher interest rates.  If the market changes or your personal circumstances change and you’re forced to sell, you will lose money if you made little or no down payment.  Plus, you need to set aside 1.5% - 3%.

3.       Whether you have a steady source of income. Buying a home is a long-term financial commitment, so you’ll need a consistent cash flow to cover those monthly payments.  If you have a contract job, you need to take a good look at your future cash-flow abilities.

4.       Do you have an emergency savings fund?  You are one step closer to being prepared for homeownership if you have enough money to cover three to six months of your living expenses. You may choose to buy mortgage insurance that can cover the mortgage in cases of a serious illness, unexpected layoff or even a natural disaster that prevents you from working.  For more information, please check the Canada Mortgage and HousingCorporation (CMHC) website.

5.       Have you had your debts under control? Mortgage lenders usually will take a look at your debt-to-income ratio before they give you a mortgage.  In general, they want to ensure that your monthly housing costs – including principal, interest, taxes and insurance – will consume no more than 1/3 of your monthly gross income. Plus, your total debt payments, including your mortgage, credit cards, student loads and auto loans, will remain below 38% of your total pay. Therefore, if you have large outstanding debts, try to pay them down before applying for a mortgage to make sure you can qualify for as much money as you’ll need.

      Do you have a good credit history? The higher score you get the lower interest rate you may receive. For more information, please check the credit score chart.


6.    Do you have a good credit history? The higher score you get the lower interest rate you may receive. For more information, please check the credit score chart.

Rent to Own


What happens if you decide to purchase a home but do not have enough down payment or can’t get a mortgage? Instead of staying renting, there is an alternative option – Rent to Own - to help you own your home today.  The benefits of Rent-to-Own your own home far outweigh those of renting. Here are some of the reasons:


1.       Build equity on your own home over time. In general, houses tend to appreciate every year. Think about it, your landlord is building equity on his property, the same property that your are paying the rent for. Instead of putting more money in his pocket, why not add it to yours?

2.       Lock the home price and accumulate your down payment now rather than later. If you Rent to Own your home today, you can negotiate a future purchasing price and you can also choose to start set aside certain amount of rent as your credit towards your down payment. For more information, please check how Rent to Own homes work.

3.       Build your credit or repair your bad credit. For those who never have any credit history or those deal with challenging credit situation, Rent-to-Own is a good way to build or repair your credit. Normally it will take 2 or 3 years to build healthy credit history dependent on your credit score. For more information, please check the credit score chart.

4.       Start to stay at your future home today. Be your own boss and do the upgrades and improvements that you couldn’t do when renting.  If you Rent-to-Own your home, most likely you can have pets living with you.

Monday, 28 October 2013

How long does it take to repair bad credit?

A credit score is rated on a scale of 300 to 900 points, with a higher number being a better score. The following table will help explain what impact your score will have on your borrowing ability:




Score range
Impact
300-649
You won’t be able to get credit at this point. You will have to continue paying your bills on time and waiting for your score to improve until it reaches the next level.
650-699
If you are paying your bills on time and reducing your debt levels diligently, you can get the 600 level in about 3 years. But at this stage, you still present a pretty significant risk to lenders. You do get some credit but most likely come at a fairly high interest rate.
700-759
You shouldn’t have a problem getting credit and it will come at reasonable interest rates but not the best rate. Most likely you won’t be able to get this level less than 4 years even with the best consumer behaviors.
760+
If you reach this level, you will get the best interest rates in the market.

 For more information, please check the Office of Consumer Affairs (OCA) website.

Sunday, 27 October 2013

Does Rent-to-Own fit for you?


Rent to own home can be the ideal solution for you if:


·       You are a young couple just starting up a family.

·       You decided you want to own instead of rent, but were turned down for a mortgage by the bank because you have bad credit or you don’t have a credit history.

·       You have a steady income but not enough down payments.

Thursday, 24 October 2013

Rent to Own - Benefits and Risks to Sellers

Rent to Own Benefits to Sellers 



·         If the home values are falling at the end of the term, sellers can lock in a higher price at the start of the agreement.

·         Renters who are willing to buy the home generally treat their living space better as they are planning for their future.

·         At the end of the term, if buyers decide not to buy the home, the sellers will keep the original deposit and savings credit as income.

Rent to Own disadvantages to Sellers


·         If a new potential buyer who wants to purchase the home at the end of the agreement with a higher price, the seller still has to abide by the agreement signed with the previous buyer.

·         If buyers decide to buy the home at the end of the agreement, it’s difficult for the sellers to buy another rent-to-own property at that price offered to buyers.

·         Most sellers use the rent they earn to pay the existing mortgage on the rent-to-own property. If the rent can’t make payments, few sellers can afford to pay both rent-to-own property and their own home mortgages, which could force them into foreclosure.

Rent to Own - Pros and Cons to Buyers

Rent to Own advantages to Buyers



·         Buyers have time to accumulate money for down payment and repair their credit history as they rent the house.

·         Buyers can stay in their dream home today at the cost of renting it. No delay!

·         If the housing market collapses at the end of the term, buyers can walk away. Although the buyers will lose the original deposit and all their savings credit, the amount will be much less than if the buyer had bought the home outright and tried to sell it later.

·         At the end of the term, there won’t be any closing costs involved.

Rent to Own risks to Buyers


·         If the buyer is late on a month’s rent payment, even it’s one day late, most agreements void the savings credit for that month. Therefore, the buyer in the rent-to-own agreement must pay on time, every time.

·         Buyers still have to pay the upfront deposit. It’s usually 3% -5% of the agreed-upon selling price of the home and is often thousands of dollars. It may be difficult to accumulate that much money before renting although it goes to the down payment should the buyers decide to buy the home.

·         All those responsibilities and repairs are the responsibility of the buyer, even during the rental period. i.e. cut the grass, shovel snow or replace a stove.

·         At the end of the term, the buyer still may not be able to buy the home for various reasons: insufficient down payment, bad credits and/or unstable/not enough income.

Wednesday, 23 October 2013

How rent-to-own homes work

What happens if you want to own a house instead of renting but do not have enough money saved for a down payment or your credit is not good enough?  For many, the rent-to-own home may be the best option.




The process works similarly to a car lease: You have to pay a certain amount each month to live in the house and at the end of a set period, generally within three years; you have the option to buy the house. A portion of the monthly rent you pay goes toward as your down payment to eventually purchase the home.
Before entering into an agreement, both sellers and buyers need to agree on the sale price and monthly rent. Both amounts are subject to negotiation, just as a regular sale would be. Once they sign an agreement, the sale price of the house is locked in until the end of the term. Even if other housing prices rise or fall in the same area during the time period, the original agreed-upon price is final.
Renters need to choose which savings credit options they want.   The savings credit is a set amount that the renter pays the seller. If, at the end of the term, the renter buys the home, the credit becomes part of the down payment. If the renter doesn’t buy the home, the credit becomes income for the seller. Typically, rent premiums are an amount slightly above the normal rent, with a portion of that money going toward a down payment.
Here is an example:
Current Market Value
290000
Annual growth rate
5%
Home price in first year
304500
Home price in second year
319725
Home price in third year
335711
3%
5%
Deposit (3% -5% for the current price)
8700
14500
"No" Savings program
"Gold" Savings (10% credit)
"Platinum" Savings
(20% credit)
Monthly payment
1550
1650
1750
Monthly savings credit earned
0
165
350
Actual rent paid
1550
1485
1400
Savings credit earned in first  year
0
1980
4200
Savings Credit earned in 2 years
0
3960
8400
Savings Credit earned in 3 years
0
5940
12600