Soon, You Can Own The Property You Rent

Soon, You Can Own The Property You Rent

Soon, You Can Own The Property You Rent

Unless you are willing to burden yourself under a heavy loan, it would be almost impossible for you to buy a house in a city where you are a salaried employee, living in a rented place. However, in case you are not ready with about 20 per cent of the total value of the property to make the down-payment, even the will to burden yourself under a loan would not be enough.  In short, buying a house might remain a dream for you till you meet both the conditions. This, however, might change soon.

Under the government's Rent-to-Own scheme, which will be part of the National Urban Rental Housing Policy, property ownership will be conferred upon tenants if they rent from government bodies housing units for a specific period and are able to pay the entire value of the property in easy installments. The move is likely to help those working migrants afford housing who can neither get a loan nor save upfront money to invest in property.  There are also plans to use government land and slums to develop housing to be given on rent for a specified period with a no-eviction guarantee. The model Act has yet to receive an approval from the Cabinet.

Also read: Caution Renters, The Taxman May Come After You

According to Census 2011, 27 per cent of India's urban population lives in rented accommodations. So, what else is the government doing to make renting a more lucrative option?

As it stands today, archaic rent control laws are partially tilted in favour of tenants. In fact, tenants of prime land in national capital Delhi and financial capital Mumbai pay a pittance to their landlords for land that is extremely valuable, for there areas are regulated by the archaic law. Once the National Urban Rental Housing Policy is adopted, a landlord will find it more favourable to rent their properties.

The government is also mulling to shower upon landlord another incentive to increase rental stock. A rebate in property tax is one such measure. Plans are in the works, say media reports, to calculate property tax on premises let out as hostels under residential bracket.  Utility charges will also be calculated accordingly for such units.

Also read: 10 Things Landlords, Tenants Must Know About Draft Model Tenancy Act

 MakaaniQ lists advantages and disadvantages of rent-to-own properties:


  • Rent-to-own properties are also the ultimate option for buyers or tenants who are unable to qualify for home loans due to poor credit scores. They can utilise the period of their rent-stay to arrange for finances or rectify their credit scores.
  • For buyers who love to wait and watch before finalising on a property, rent-to-own option proves to be an ideal choice. It does not restrict them to just one option and gives the flexibility in choosing the right home. Buyers could tune themselves to the market situation. That is, they could stay on rent till the prices do not drop. Later when prices stabilise they could plan to buy a property.
  • Buyers, under rent-to-own schemes, have the advantage of experiencing community living and judge if the apartment matches their lifestyle, before taking the plunge.


  • Rent-to-own tends to be a costlier proposition initially because apart from the monthly rent, the tenant will be required to pay an additional amount of money which will go towards the down payment.
  • Breaching a rent -to-own contract could lead to legal troubles for the buyer.
  • The selling price of the property specified in the agreement is fixed. Also, as per the contract, he will be required to make a non-refundable deposit to the property owner. So, a tenant who wishes to purchase the apartment expecting a reasonable rate owing to fall in market prices is set for disappointment as he would be bound to pay the predetermined amount.

Also Read: Did You Know You Can Rent Furniture Too?

Last Updated: Thu May 04 2017

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