• Rent To Own strategies offered by a professional, licensed, bonded and insured REALTOR ®.
  • Full MLS exposure included for all Rent To Own property sellers.
  • My brokerage is Sage Executive Group Real Estate the Okanagan's BIGGEST independent brokerage.

Sell And Buy Example

This is an example of how a seller can purchase a new property with our rent to own option. Everyone's situation is different and will have variations to this example such as mortgage balance and lease payments. To determine how, and if, this strategy will work for you we will have a licensed mortgage broker contact you to evaluate your specific information and to discuss necessary plan that you need to ensure your objectives are met.

This particular example is prepared to illustrate how Rent To Own can be used to purchase a $450,000 property when you currently own a $300,000 property with a $150,000 mortgage:

  • A typical Rent to own agreement on a property valued at $300,000 would have the tenant/buyer paying a $1600 month lease payment with an additional $500 monthly option fee = $2100 total.
  • This example assumes the seller owns a $300,000 property, with a mortgage balance of $150,000 and is paying $1200/mth in mortgage payments.
  • Lending rules currently in effect allow for the seller to mortgage the property to 80% of the appraised value.
  • Sellers obtains a new mortgage of $240,000 paying off the $150,000 owed on the original mortgage, leaving $90,000 cash balance for the seller. The new mortgage estimated monthly payment on the original property is $1150.
  • Seller applies the $90,000 cash plus the $10,000 option payment provided by the tenant/buyer as a deposit on the $450,000 property leaving a mortgage of $350,000. The estimated mortgage payment on a 25 year amortization would be $1700/month.
  • Seller presents new lease on the original property showing a $1600 month agreement in place. This is used to "offset" the mortgage payment. Hence it doesn't interfere with the sellers ability to qualify for the $450,000 home purchase.
  • In addition to the lease (rental amount) the seller receives a further $500/month option fee from the buyer/tenant for the "option to purchase" the original property.

Positive Cash Flow Overview on Original Property

+ $1600 Lease (rent) payment on initial property

+ $500 option fee on initial property

- $1150 mortgage on the initial property

- $200 taxes on initial property

- $60 insurance on initial property

= + $690 positive cash flow to the seller on original property.

New Property Mortgage vs Old Original Mortgage Analysis

Old Mortgage Cost = -$1200y

Total increased mortgage cost = -$500 more


Positive Cash Flow = + $690

Total monthly cash = +$190

The new mortgage is $500 more expensive per month BUT the seller has a $690 positive cash flow from the existing property. The seller has $190 positive cash flow with the transaction