What is Lease to Own?
Lease-to-own is a very simple premise and was very popular in Abu Dhabi in 2011/2012. Residents of both Sun & Sky towers and the St Regis apartments were given the option to lease-to-own. See our guide to buying here
Call Cristy on 050 800 4388
How Does Lease to Own in Abu Dhabi it Work?
How it works is you sign a normal lease, often at a slight premium to the market value. You also sign something called an option agreement (this may form part of the lease agreement). The option agreement gives you the option, but not the obligation, to buy the property within a set period (three years is standard) at a certain price (the Option Price). The real sweetener is that the landlord will deduct the rent you have already paid (or a portion thereof) from the sale price, so if you don’t have much of a deposit this is the perfect way to save as if you exercise your option after three years you get all (or a portion) of three years rent back.
There is also the added kicker that the Option Price is fixed so you can exercised your option if the market prices goes up, or not exercise it if the market goes down (but you would lose your deposit). People who leased to own in the St Regis are currently seeing sale values of 15-20% above their option prices (and they get a portion of their rent back which can be up to 90%).
Lease-to-own is also great for budding investors as there is no need to get financing. You can take on several units with no need for a mortgage/finance. You do need to make sure that when you exercise your option you will be able to get bank finance for the shortfall though.
Now sadly the St Regis and Sun & Sky lease to own schemes have closed but there is still an option for lease to own in Abu Dhabi in a great new tower with glass balconies and full facilities.
See can see our properties for sale here. It works as follows:
- The tower is fully occupied so you can wait for a unit to come free or if you are an investor you have a sitting tenant;
- You are given an option price which is current market value, you will need to put down a 20% deposit first;
- You pay a fixed rent which goes up 5% each year for a period of three years;
- You pay a premium of 20% on the rent per year for your option;
- You can exercise your option at any time within three years;
- You have 100% of the rent (not the premium) deducted from your sale price, which if perfect if you can’t save for a deposit;
If you are interested in finding our more please call Cristy on 050 800 4388 or call Crompton Partners on 800 CPEA (2732)
Call – +971 50 8004388