Table of Contents
Always ready to share valuable insights, Gary Hibbert is renowned for his expertise in real estate, particularly in the specialized field of rent-to-own strategy in Canada. Having charted his journey from a humble beginner to a seasoned professional, Gary’s depth of knowledge is insightful and inspiring.
Gary Hibbert is a true champion in advising on successful rent-to-own deals. His experience and understanding of the Canadian real estate market are unparalleled, making him a coveted guest and expert on various real estate platforms.
Embarking on his real estate career in 2008 amidst a challenging economic climate, Gary’s journey epitomizes determination and hard work. He started exploring different strategies, attempting to determine the best path forward. Ultimately, he found his niche in rent-to-own deals, which he found efficient, profitable, and rewarding.
- 2008: Entered the real estate industry
- 2010: Began focusing on rent-to-own deals
- 2012: Became a popular source for expert advice on rent-to-own properties in Canada
According to Rob Break, the show’s host, “Gary’s experience and success in the field of rent-to-own deals have made him a highly sought-after expert who has a lot to offer to aspiring real estate enthusiasts.”
Gary continues to leverage his profound understanding of the rent-to-own strategy, helping potential homeowners and investors navigate the intricate Canadian real estate market. His advice has been instrumental in the successful homeownership of several individuals in Canada, underlining the efficiency of the rent-to-own strategy.
“Gary continues to inspire and guide many on their journey to homeownership, affirming that real estate is a viable and profitable investment option,” says Rob.
But first, if you want financing for your next investment and want to know what type of collateral may be involved, click the link below for a free strategy call with our mortgage team at LendCity to discuss your specific situation.
Understanding Rent-to-Own Deals
In this episode, Rob Break sits down with GARY HIBBERT, an expert in Rent-to-Own (RTO) deals, to give the listener a comprehensive understanding of the subject. RTO transactions aren’t as every day as traditional home buying methods, but they offer unique advantages that make them an attractive choice for many.
The concept behind an RTO deal is straightforward. It allows potential homeowners to move into a property while they prepare financially to purchase the property. In other words, they rent the property with the intention, but not obligation, of buying it in the future.
An RTO deal consists of two vital parts – a lease agreement and an option to purchase. You rent the property just like any other rental property; however, you also hold an option to buy the property at a predetermined price during the lease term.
Critical Elements of a Rent-to-Own Deal
- Option money: This is the initial payment made by the tenant/buyer to the landlord/seller for the right to purchase the property. This could be significant, though less than a regular down payment.
- Rent premium: The monthly rent payment goes toward the property’s purchase price. This amount is above and beyond the typical rent price.
- Purchase price: This is the price at which the tenant/buyer will buy the property if they choose to exercise their option to buy. The purchase price is agreed upon at the start of the Rent-to-Own deal.
When participating in an RTO transaction, it’s crucial to understand these three elements and their implications. As GARY HIBBERT advises, being informed is critical to successful RTO deals.
The Benefits of Rent-to-Own Deals
The insightful discussion between host Rob Break and guest GARY HIBBERT reveals several benefits of engaging in rent-to-own deals. One of the major points they highlight is the accessible pathway to homeownership that this scheme provides.
Opportunity for Home Ownership
As Gary Hibbert points out, rent-to-own deals offer a unique opportunity for individuals who might not be able to afford an immediate outright purchase of a house. The renter can reside comfortably while making regular payments, contributing to eventual property ownership.
Fixed Purchase Price
Secondly, as Rob adds, these contracts often have predetermined purchase prices. This means that regardless of the fluctuations in the real estate market, you, as the renter, have a fixed price to work towards.
Credit History Improvement
GARY HIBBERT notes that these deals can serve as a stepping stone towards improving credit scores for those with less than stellar credit history. On-time monthly payments can demonstrate a potential homeowner’s commitment and fiscal responsibility to lenders.
Equity growth is another critical benefit emphasized in the discussion. The proportion of rent payments that go towards the purchase price helps to increase the renter’s equity in the property gradually. Rob Break states that this can lead to significant ownership stakes over time.
Test Drive the Home
Finally, Gary points out that a significant advantage of rent-to-own agreements is the ability for renters to essentially ‘test drive’ the property. Renters can live in the house, experience the neighbourhood, and assess the actual cost of homeownership without the immediate commitment of a purchase.
In conclusion, the discussion between host Rob Break and guest GARY HIBBERT clearly outlines the benefits available to individuals choosing a rent-to-own path to homeownership. By offering buyers the chance to build equity, improve credit, and lock in a purchase price while living in the property, these deals can provide a viable alternative to traditional property purchase methods.
How Rent-to-Own Works in Canada
In this episode, Rob Break and his guest, GARY HIBBERT, delve deep into the mechanics of Rent-to-Own agreements in Canada. They discuss the fundamental elements of these agreements and provide a clear path for anyone interested in leveraging this unique property acquisition strategy.
First and foremost, a Rent-to-Own agreement involves two primary actors: the potential buyer (tenant) and the property owner (landlord). As suggested by the name, Rent-to-Own consists of the tenant renting the property with an option to purchase it after a given period.
- Tenant: The party interested in buying the property. They agree to lease and can purchase the property at a future date.
- Landlord: The current property owner. They agree to lease their property and potentially sell it to the tenant.
GARY HIBBERT underlines the importance of the Option to Purchase clause in the lease agreement. This clause gives the tenant the right (not the obligation) to purchase the property at an agreed-upon price. It is vital to note that the tenant can decide not to exercise this option and continue renting.
Beyond the rights and obligations, the financial implications are also critical. Typically, the tenant pays an Option Fee at the start of the lease. This non-refundable fee gives the tenant the option to buy the property. Moreover, a portion of the monthly rent usually goes towards the future purchase of the property.
- Option Fee: An upfront amount paid by the tenant to the landlord. This fee isn’t refundable, even if the tenant decides not to purchase the property.
- Rent Premium: A portion of the tenant’s monthly rent. This part contributes towards the final purchase price of the property.
In conclusion, Rent-to-Own deals can be a viable property acquisition strategy in Canada. They provide a unique advantage for those who might not qualify for a conventional mortgage. However, understanding the process and financial implications is crucial to making sound decisions.
Finding the Right Property for Rent-to-Own
Rob Break starts the discussion with GARY HIBBERT on the critical aspect of finding the right property for rent to own. It is not just about finding any property but the right property that aligns with your goals and financial capabilities.
Rob mentions that investors must know their objectives, budget, and investment capabilities before searching for properties. Before beginning the property hunt, he advises understanding one’s financial stability, risk tolerance, and ultimate goals.
Rob’s guest, GARY HIBBERT, adds to this by emphasizing the importance of financial preparation. He suggests that investors should have a well-thought-out plan and secure financing options. Income stability is a green signal for lenders, aiding an investor’s credibility.
Once financial readiness is ensured, GARY shares that the next step is considering the property’s location. Viewing a location with a reasonable appreciation rate, steady economic growth, and a promising future is crucial in rent-to-own deals. Both Rob and GARY agree on the significance of this step, as it determines the investment’s success to a great extent.
The duo then moves to property types. They underline that investors should be open to different properties – detached, semi-detached, townhomes, condos, etc., provided they align with their investment goals and budget. They discuss the pros and cons of these property types, giving the listeners a rounded viewpoint.
Rob concludes this section by establishing that the process of finding the right property for a rent-to-own deal requires patience, research, and understanding of one’s own objectives. Following these methods can help investors find the property that’s the right fit for their investment plans.
Common Challenges in Rent-to-Own Deals
In episode 7, Gary Hibbert begins by highlighting the complexities that often come with navigating rent-to-own deals. In his conversation with host Rob Break, he emphasizes that understanding these challenges is paramount to successfully executing rent-to-own agreements.
The first challenge that they discuss is the legal landscape. Hibbert points out that laws relating to rent-to-own arrangements can vary greatly, even within Canadian provinces. This requires investors and renters to know sufficiently about their local legal frameworks.
“You have to understand the local legislations. This requires careful research and possibly consultation with real estate attorneys,” advices Hibbert.
The second challenge that Hibbert discusses is building trust. Rent-to-own deals often involve long-term commitments, and both parties must feel confident that the other will fulfill their obligations. This can be particularly hard to establish in the beginning stages of the relationship.
Finally, Hibbert touches on the issue of financial planning. He explains that mistakes can be costly, so careful planning is essential. Renters must diligently ensure they can manage the rent payments and potentially higher future purchase prices. On the other hand, investors need to consider their returns and weigh the risks involved carefully.
In the following sections, Hibbert and Break delve into various strategies for overcoming these challenges and how one can effectively navigate the landscape of rent-to-own deals in Canada.
Overcoming Obstacles in the Rent-to-Own Process
On this episode of Rob Break’s esteemed podcast, he engages in an enlightening dialogue with his distinguished guest, GARY HIBBERT. They highlight various hurdles faced during the rent-to-own process and techniques to surmount them.
The rent-to-own process can seem intimidating initially. Hibbert sheds light on how potential risks can be mitigated. He explains that the first step is being well-informed and prepared. Gathering as much information as possible about the property and the seller will help reduce the anxiety and potential risks.
Next, they discuss how crucial negotiation skills are in the rent-to-own process. Hibbert shares his personal experiences and tips on negotiating effectively with property sellers.
A conversation on rent-to-own wouldn’t be comprehensive without touching on legal aspects. Hibbert emphasizes the importance of seeking proper legal advice before signing any contract. He says this is one of the best ways to overcome potential legal obstacles in the rent-to-own process.
The final topic in their discussion revolves around securing financing. They discuss methods for potential buyers to secure adequate funding, tips for keeping credit scores clean, and strategies for negotiating loan terms with lenders.
This engaging conversation between Rob Break and GARY HIBBERT offers listeners essential guidance and valuable strategies for negotiating the potentially tricky path of rent-to-own transactions in Canada.
The Future of Rent-to-Own in Canada
In this segment of our discussion with GARY HIBBERT, we explore the future of rent-to-own in Canada. Gary shares his insights and predictions based on his extensive experience in the field.
The trend of Rent-to-Own is likely to grow in the future, as this investment strategy offers more people the opportunity to own their own homes. Ease of access and affordability, especially for first-time buyers, appeals to many Canadians.
From an investor’s perspective, Rent-to-Own is a compelling investor’s strategy for portfolio diversification. As the Canadian real estate market continues to be robust, investors continually seek varied and innovative ways to increase their returns. Rent-to-Own fills this spot perfectly.
Changes to legislation could also impact the future of Rent-to-Own in Canada. As with any investment model, changes to laws and regulations must be closely monitored. Gary suggests that investors should stay updated on these regulations and changes, which could affect their return on investment.
In conclusion, the future of Rent-to-Own in Canada looks bright, according to Gary. He believes the combination of accessibility for potential home buyers and opportunity for investors makes it an attractive option for all parties involved.
This concludes our discussions with GARY HIBBERT about Rent-to-Own deals in Canada! Stay tuned for upcoming episodes where we will explore other exciting areas of real estate investing with our host, Rob Break.
If you are ready to start investing today and want more information about how your mortgage may be secured – or are looking to apply for a mortgage today – click the link below for a free strategy call with our mortgage team at LendCity today.