Private Property chats to Meyer de Waal, the founder of Rent2Buy, a new home ownership concept that seeks to provide ordinary South Africans with the opportunity of owning their own home.
Marc:
So I'm here with Meyer de Waal from Meyer de Waal and Corporate attorney's. And also obviously Rent2Buy. Really curious to find out what that means , because I understand what renting is, I understand what buying is, but what is Rent2Buy?
Meyer:
Rent2buy is a unique concept. We started rent2buy, being a property attorney, 11 years ago. And last year, a group fund came to me and said they're going to change my life. And I asked them, "How are you going to do that? Are you going to give me a lot of stock, because I'm always looking for rent to buy stock." And they said, "Well, we've got lots of money for you." So I said, "Well, when money talks, we listen." So what we've put together is a rent to buy concept where the price ranges are from 400,000 rand to 1.8. We started with a pilot project in the price range 400 to 1.8, and in Capetown Metropole to Gauteng.
So the moment we can prequalify a home buyer, we issue them with a certificate. And that certificate is as good as a cash buyer. The buyer has to put down a 7% deposit. If he buys from an investor, that has to be a three to five percent deposit. We then take transfer of the property. We keep the property for a period of two years. During that time, we bring in all our goodies like Home Owners Education, debt repay budgeting tools. And in month 22, we have a look at the customer's profile. Did he pay his rent every month on time? Were he up-to-date? Did his credit record improve?
Marc:
So wait I am confused… what happens after the 2 year period??
Meyer:
At the end of a 22-month period, we can convert that rental into three opportunities. The first opportunity is, we can do an installment sale for you. And you pay back that rental amount. The purchase price, you pay that back to us over a period of 20 years. We freeze the price for you from day one. And the second opportunity is where we can apply for a home loan. Maybe you want to do a little bit of a less monthly installment. The bank will maybe give you a prime, maybe prime less a half. And with that you can actually take transfer and become the home owner. The last opportunity, maybe you want to move on with your life. And you say to me, "Meyer, I actually want to move out to a different property." Then we can assist you to actually market the property, put it on the market, and if you find a buyer that is going to pay you a higher price, we can then assist you to take transfer, sell the property, and put the profit of the money into your pocket.
