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Tenants, now you can buy that house you’re renting

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Between 30% and 50% of all first-time buyer bond applications are denied, according to stats by bond originator, BetterBond, and Rent2buy founder, Meyer de Waal. BetterBond CEO, Shaun Rademeyer, notes that the average home price in the year to end-June was R1,095m, with the average approved bond size in the year to end-June being R868,000.

What this essentially means is that first-time buyers need around 20% of the home’s purchase price to successfully qualify for a bond – or R227,000. By the same token, even a R500,000 home requires a R100,000 deposit to demonstrate to a bank that you are a safe bet.

An average first-time buyer salary (household income) is now R37,000 per month – or R444,000 annually.

Setting aside 10% of an average first-time buyer’s salary, it would take around 27 months to save R100,000 towards a deposit on a R500,000 home – or 54 months to get a R200,000 deposit on a R1m bond.

Many first-time buyers do not have the means, diligence or ability to set aside 10% of their salary towards a house deposit – especially while renting.

PayProp figures show that the weighted average national rental price has now breached the R7,000 per month mark for the first time.

If prospective first-time buyers are already paying R7,000 per month in rental (excluding water and electricity costs, as well as rental inflation), and need to save R3,700 per month towards a deposit, they will have to forego more than R10,700 per month for between 27 and 54 months.

But what if first-time buyers could first rent the home they were going to buy, with built-in equity going towards their deposit?

This may soon be a reality for more prospective homeowners, thanks to Rent2buy – the brainchild of attorney and residential market innovator, Meyer de Waal.

“The development of some 10,000 houses over the next few years by a leading property group may release more Rent2buy units to aspiring homeowners,” he says, noting that some property developers have already realised that a Rent2buy buyer today can be a “ready-to-buy-buyer” some six to 18 months later. “We recently met with one of the largest property developers in South Africa and they plan to construct some 10,000 new homes in the next few years. The units will be constructed over a period of time and this it will be an ideal opportunity for a home buyer who is almost ready to buy a home, but not yet 100 % there, to get his or her foot in the Rent2buy door.”

Meyer de Waal, creator of My Bond Fitness.

Meyer de Waal, founder of Rent2buy

How it worksbuilding a house in lego, unfinished

Sellers grant buyers an option to buy the property at a predetermined price. This option can be exercised six to 24 months later. The terms and conditions of the sale agreement are added to the agreement with a lease for the property.

“Usually a higher Rent2buy rental amount is payable and it can be negotiated that the extra rental paid is allocated towards a savings towards a deposit for when the property is later purchased,” says de Waal, adding that one of the challenges is to find a Rent2buy property in your area, that matches your requirements, your price range, your affordability and your Rent2buy timeline. “Such a Rent2buy property is thus not easy to come by. We decided to enable aspiring home buyers to get started early, so by the time the Rent2buy units become available, they will be ready to proverbially ‘knock on the door’ to secure their own home.”

This is done by a simple sign up to the Rent2buy database where, besides getting the inside track on new Rent2buy opportunities, subscribers will have access to homeownership preparation guides, affordability scoring as well as being eligible for Flisp subsidies (if you earn less than R15,000 per month).

Interested? Sign up here


David A Steynberg, managing editor and director of HomeTimes, has more than 10 years of experience as both a journalist and editor, having headed up Business Day’s HomeFront supplement, SAPOA’s range of four printed titles, digimags Asset in Africa and the South African Planning Institute’s official title, Planning Africa, as well as B2B titles, Building Africa and Water, Sewage & Effluent magazines. He began his career at Farmer’s Weekly magazine before moving on to People Magazine where he was awarded two Excellence Awards for Best Real Life feature as well as Writer of the Year runner-up. He is also a past fellow of the International Women’s Media Foundation.

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  • mothusi 16th October 2017

    I’m presently renting a house for R1000 a month and the owner is prepared to sell it for R80000.00. How can you assist me? I have been employed for ten years by government and my nett is R16500.00

  • mothusi 16th October 2017

    Pls help me to buy a property I’m renting for 1000 a month, my nett monthly is 16500 and have been a public servant for ten years
    Cell 0793966716

  • Vhutshilo Ali 23rd July 2018

    Hi. My name is vhutshilo. Am a self employed and am renting a flats for R4000 per months. How can you help to become a house owner please.