Homely rent to buy

I think that they are legit in the sense that they are not scammers.

But it's hard to see how this works for the homeowner. They don't sound like a charity.

Find your home the Homely way​

Rethinking the traditional home ownership model - how Rent-to-Own works in terms of costs and discounts​

Let’s say you find a home for sale at €425,000. Homely will purchase the property, you’ll pay us a fee of 2.5% of the purchase price and your tenancy agreement begins. In this example, we’ve agreed your monthly payments to be €3,000, increasing marginally each year.
Based on a five-year term, at the end of that period when you decide to purchase the house, we will offer you a discount on the purchase price equal to 20% of the rent you paid during the five years. In this case, the discount will be around €38,750.
If the new market value of the house at the end of the five years is €536,500 and our original base costs were €460,000, we’ll give you a further discount on your purchase price of 20% of the difference which is €15,300.
Your total discount will be €54,050, or 10% of the new market value. This means that your discounts can count towards the deposit you need to qualify for a mortgage. And this is not even considering the amount you may have saved yourself during the five-year tenancy period.
The above is an example of how rent-to-own works for illustrative purposes only. All rents, base costs, and discounts will be agreed between Homely and each customer at the outset but will be strictly dependent on your personal circumstances, property type and location.
 
I just looked at their website and they don't seem to have an FAQ

What happens if you dont' want to buy it after 5 years?
What happens if the price falls?

If you see your dream home, why don't you just buy it instead of paying 8% rent a year?

Brendan
 
Brendan Burgess said:
I just looked at their website and they don't seem to have an FAQ

What happens if you dont' want to buy it after 5 years?
What happens if the price falls?

If you see your dream home, why don't you just buy it instead of paying 8% rent a year?

Brendan
Click to expand...

Change your mind?​

We understand that sometimes life doesn’t work out as expected. If for any reason you decide not to purchase the home at the end of the tenancy period, you can simply hand us back the keys. As long as you have paid all outstanding tenancy payments and there is no damage or repairs needed, you will not have any further liability or obligation to us.
 
How does it work from their point of view?

they buy a house for €400k
They get 2.5% up front
They get 8% a year in rent
They knock some of the rent off the purchase price if you buy it.
they give you a discount on any increase in value

Would they not be better off just buying a batch of apartments for €400k each and collecting 8% rent?

I suspect that there is a catch which I am not seeing.

In the example, the house costs €425k but the "base cost" is €460k . Not sure if that is significant?
 
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