London is one of the quieter real estate markets in the province of Ontario but the Stats show this won’t last. The average year-to-date sales price was $331,524 – up 18.8% from the 2016 average home price of $279,057. While this is a bit under what other areas in the GTA are showing, it is significant growth. As an Investor, we recommend you look closer at London as an Investment destination. The average prices are lower making your initial Real Estate Investment more manageable.
So what does this mean for Real Estate Investors considering HOS Financial investment opportunities?
London is the type of market that excites real estate investors. A lot of the buyers are looking for their first home purchase, and they’ve chosen a city where they can get more home for less money. This also means that they may be pushing the limits of what they can borrow. You’re also looking at couples who are looking to start a family and are ready to leave that apartment/condo lifestyle behind. With tighter lending guidelines, a lot of consumers who apply for mortgages will experience difficulty securing a mortgage approval despite having the means to afford the payments on a home. HOS Financial’s Rent to Own program could help keep many of these consumers get out of the rent cycle. A lot of people think that “rent to own” means looking down a small set of listings on the back of the classifieds and having to settle for much less in terms of quality. However, in the aftermath of the 2008 housing collapse, more and more people are hearing “no” from traditional lending sources. Bank lending guidelines have become much more conservative, particularly in the areas of credit score and income verification. That means that a lot of people who would have qualified for mortgages before – and have the means to purchase homes in upscale parts of Canada, including the London Region – need alternate forms of financing. If they don’t have the large down payments that private lenders ask for, then they often end up looking to purchase a home through Rent to Own.
Even if you don’t have the money to purchase an investment property and put it on a lease purchase agreement for two or three years, you can Joint Venture with other investors and still invest in a Real Estate Opportunity from HOS Financial.
Here’s how it works. You invest, either as a sole owner or as part of a group, in a property. In many cases, a borrower/tenant has approached us with interest in a particular house, and then you invest in that house. The borrower/tenant then puts down a deposit – typically a minimum of five Percent of the House Value. This will eventually go toward the down payment at the end of the agreement, but for now you hold it as the security deposit and it forms part of the Down payment when the client goes for fan Exit Mortgage at the end of the Rent to Own Term.
Then the borrower/tenant starts paying rent each month. The rent is set at or near the top of the local market, and then on top of that the payment includes a monthly contribution toward that eventual down payment. You benefit from the interest on that money – and in the unlikely event that the borrower/tenant cannot qualify for bank financing when the lease term ends, you get to keep 95% of the money – the deposit, the rent and the extra payments for down payment credits.
As HOS Financial works closely with their Tenant buyers to ensure they are bankable at the end of the Rent to Own Program, the success rate for tenants securing a mortgage at the end is very high. HOS Financial screens potential borrower/tenants just as carefully as the banks do, and we have developed a reliable system for identifying people who are (and are not)likely to succeed in this system. So at the end of the lease purchase, you walk away with a Great Return on Your Investment. The best part is this income is very passive!
Interested in what HOS Financial has to offer? Give one of our rent to own specialists covering the London Region a call today. We have helped many investors turn a profit that rivals gains from mutual funds and stock investments without the risk that the markets represent. We look forward to talking to you and helping you decide whether HOS Financial is the right investment choice for you.