Apex Western Homes, a North Vancouver-based property developer, is offering a rent-to-own program for multimillion-dollar homes as a way to help prospective buyers get into Canada’s most expensive housing market.
Raymond Vesely, CEO of Apex Western Homes, said he would allow those interested in the program to lock in a five-year lease with 5% down. He added that the deal is similar to traditional home purchases, but with five years to close.
A portion of the buyer’s rent each month will go toward their future purchase. The buyer also has the option to purchase the home between one and five years at the rate locked in on the date the agreement was made. If the home’s value increases, the buyer can keep the market gains.
Rent is higher than in a traditional lease, but the money will go into building up a down payment for the future mortgage. Once renters decide to take advantage of the “buy” option, they can apply for a mortgage and use the equity already built up in the home.
Vesely came up with the idea following a divorce, but was also inspired by his staff’s struggles in the Vancouver housing market.
“I try to come up with creative ways to help them get a place … I’ve been thinking about this program for a while,” Vesely told CTV News Vancouver.
The rent-to-own option is meant to help those who want to buy their own place, but are unable to amass a down payment. The minimum down payment in Canada is 5% of the first $500,000, but those buying a home priced at $1m or more are required to have a 20% down payment.
In Vancouver, where the benchmark detached home price was $1,617,300 in September, according to the Real Estate Board of Greater Vancouver (REBGV), down payments can easily exceed $200,000.