Steyn City has introduced a ‘Rent-to-Own’ option for a selection of its luxury apartments in its flagship development, City Centre, making this coveted lifestyle accessible to a larger number of first-time homeowners as well as those reeling from the financial effects of the high interest rate environment.
The model will also be attractive to those considering moving out of their freestanding home in the suburbs due to security concerns or changing requirements, and who are looking to invest in a lock-up-and-go lifestyle to trial apartment living.
Although not commonplace in the SA property market, this model is employed by property developers around the world. Steyn City Properties Head of Sales & Rentals, Lambert Bezuidenhout, says that the developer decided to implement the model based on market feedback over the past few years.
“South Africans have been hard hit following the lockdown, rising interest rates and general economic uncertainty. Load shedding and poor service delivery all add to the stress consumers are experiencing. The Rent-to-Own model will assist potential buyers to attain the stress-free lifestyle they desire by giving them a two-year grace period to build up their credit rating, if required, before they purchase their home while saving a considerable sum of monies towards the final purchase price.”
“At the same time, the model protects buyers against the current interest rate cycle by providing what could best be described as an ‘interest rate hedge’ until interest rates normalise. City Centre also provides residents with ‘always on’ features like generators and piped gas to each apartment home as well as a back-up water reservoir offering the apex of luxury and convenience living,” he says.
The model sees potential purchasers signing on for a lease period of 24 months. At the same time, they need to enter an option to purchase agreement. They need only exercise their purchase option in month 23 of their lease agreement; however, if they are not able to purchase the home at this time, or simply decide not to exercise the option, the convenience of this model allows the lessee to continue to lease the property. The purchase price for the apartment will be fixed upfront at the time of signing both lease and sale agreements
The developer points out that this model will show significant cash flow benefits to the lessee for the 24-month period until they exercise the option to purchase, due to the significant difference between rental costs and typical bond repayments. Added to this, rates and taxes and levies are deferred for the initial two-year lease period.
“We know that many people find the idea of our City Centre lifestyle attractive because of our outstanding facilities, as well as our secure environment, which affords our homeowners peace of mind. Meanwhile, our 2 000-acre indigenous parkland offers space on a scale which is unheard for an urban apartment. Our new option means that more homeowners can be a part of this very special legacy development,” he concludes.
