Everything you need to know about Lease-to-Own

A lease-to-own (LTO) program is a payment option that allows you to lease a home while working toward ownership, depending on the terms of the program.

If you’re considering LTO, it’s important to understand how it works, what you’ll pay, and what you’re agreeing to before you sign.

Here’s what you need to know.

Is LTO for you? 

Buying a home requires a long-term financial commitment. For many homebuyers, one of the first challenges is the downpayment. After that, the remaining balance may require bank financing.

An LTO program can provide an alternative path. Depending on the program, you may be able to lease a property without a traditional downpayment at the beginning, while working toward purchasing the property through your lease payments.

LTO may be worth considering if you want to become a homeowner but prefer not to avail of bank financing or if you are currently renting and want to work toward owning your home.

What’s good about LTO? 

An LTO scheme ideally gives more flexibility than the usual homebuying route. You can also appreciate the predictability that comes with it—the amount that you’ll pay monthly will be determined the moment you sign your contract. 

This means that you lock in the price of the property at the time of your contract signing. This is a huge plus point, considering how real estate properties tend to increase in value over time. 

What are you agreeing to? 

An LTO arrangement starts with a lease agreement which would last depending on your agreed duration. The leasing period varies among developers—some only offer up to 36 months, while others for as lengthy as 120 months. After this timeframe, or even before the contract lapses, you will be able to finally turn your leased property into your very own purchased property. 

Meanwhile—though this may be less common—some developers add a clause in your contract stating that if you’re unable to proceed with the purchase, a breach of contract and legal liabilities may ensue.  

Whichever terms and conditions you agree to, always remember to read and understand the contract thoroughly. Be mindful also of everything your property specialist tells you—they must be reflected in black and white. 

Things to prepare

Compared to simply renting a place, your monthly rent is reasonably higher under an LTO agreement because a portion, if not all, of the amount you pay fulfills the purchase price of the property. 

Some developers will require you to produce post-dated checks that cover the entire lease contract duration. Signing up for an Auto Debit Arrangement is also often encouraged to help renters avoid missing monthly dues. 

Now, if at any time you decide to cancel your Contract of Lease, there’s a chance that you may not get refunded for any payment made. So, to avoid this loss, make sure to prepare extensively to cover the rent while you’re under contract. 

However, in some LTO schemes, rent is not the only thing that you must be prepared for. Some ask for a spot payment or a downpayment after your leasing period. 

For your part, don’t shy away from asking questions. Make sure also to ask for a sample computation and payment schedule inclusive of all fees. 

Remember, it’s always better to be inquisitive than pay the price of not being called “makulit.”  There might be “hidden fees” later on, which, if you’re unable to pay, may jeopardize your homeownership journey. (Tip: Be extra wary of LTO deals that offer low monthly rent—these typically come with surprise fees!) 

For your consideration: our LTO 120 Program 

To make homeownership more possible for more customers, RLC Residences offers its very own lease-to-own option: the Lease-to-Own 120 Program. 

And we’re making it pretty straightforward. 

Under our program, the lease duration is 10 years. The monthly rent is simply the Net TCP of the project divided by 120. And, unlike with other LTO schemes, we credit your entire monthly rent into the purchase price of the property. 

We don’t ask for a reservation fee or spot payment either. 

Simply put, you only have to pay for your monthly rent, monthly condo or HOA dues, and later on, the conversion fee and documentary stamp tax. 

The LTO 120 Program is truly designed to be a no-fuss, straightforward, and honest way towards homeownership. 

This option is applicable to our ready-for-occupancy properties, like SYNC-S Tower along C5 Road, The Sapphire Bloc in Ortigas, and Cirrus in Bridgetowne, one of our most recent RFO offerings.  

FAQs

Here is a quick info rundown about our LTO 120 Program. 

How is the monthly rent determined under the LTO 120 Program? 

Your monthly rent is equivalent to the Net TCP of your property divided by 120. This is exclusive of monthly condo or HOA dues. 

Which properties are eligible for the LTO 120 Program? 

Several RFO properties qualify for this program. Reach out to a property specialist to know your options.

How long is the lease duration? 

The lease duration under the LTO 120 Program is 10 years. 

Aside from the monthly rent, what other particulars do I have to pay? 

You also need to pay the monthly condo or HOA dues on top of the lease rental. 

When can I move in? 

The LTO 120 Program is generally offered for ready-for-occupancy properties. You can move in as soon as you satisfy all requirements. Ask your property specialist for more details.

What sets the LTO 120 Program apart from other lease-to-own schemes? 

Unlike other developers, under the LTO 120 Program, we credit your monthly rent entirely into the purchase price of the property. Plus, we don’t require a downpayment or spot payment. Our 10-year leasing period is also relatively longer compared to others. 

Can I buy the property even before the leasing period ends? 

Yes, you may do so. 

How can I have a sample computation?

If you’re interested in an RLC Residences home, reach out to a property specialist to be provided a sample computation. 

What are the requirements to avail the LTO 120 Program? 

Booking requirements include full payment of first monthly rent, security deposit equivalent to 2 months’ rent, and a signed Contract of Lease with Option to Purchase. 

For a more detailed list of payment schedules and properties eligible to this program, reach out to us and we’ll be glad to assist you. 

We’re happy to help you

We look forward to guiding you to your forever home. If you need assistance with the LTO 120 Program or any of our services, please contact us through this link.