The rent-to-purchase formula allows even those who cannot take out a mortgage to buy a house. However, it’s not all rosy. Here’s what to know

According to the Ministry of Economy and Finance, three out of four families live in their own home. This certifies the predisposition of Italians to purchase bricks and, over the years, the traditional buying and selling has given way to new formulas, including rent with redemption .

An evolution of the classic rental contract which offers advantages to both the seller and the buyer but which, however, is not entirely risk-free. Here’s what to know

What is rent with redemption

The rent-to-own formula allows a lessee to become the owner of the leased asset. The lessor rents the property for a specific period and, upon expiry of the contract, the lessee pays the agreed price from which he deducts the rents already paid to the lessor in the meantime.

It is a method that allows even those who do not have immediate financial resources to buy a house and cannot access a mortgage.

It may seem like a panacea and a measure worthy of praise, because it is capable of finding a meeting point between the seller and the buyer. However, there are advantages and disadvantages that need to be weighed.

The advantages for the lessee

The rent with redemption brings with it advantages and disadvantages for both parties. The lessee, the tenant-buyer, should take these cues into account.

Throughout the duration of the lease, the buyer enjoys various advantages , including:

Start paying for the property in monthly installments (i.e. fees)

Take possession of the property immediately

Direct taxes are paid by the lessor (the seller)

Only ordinary maintenance costs continue to be charged to the lessee

In the event that the seller wishes to withdraw from the contract, the lessee can obtain a refund of the fees

Freedom to decide whether to proceed with the purchase of the property or withdraw

Possibility of transferring the contract to third parties.

By Elora