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Rent to Own vs. Buying: Making the Right Real Estate Choice as an OFW

Buying real estate is a big step for many of our Overseas Filipino Workers. Investing in it is a good way to experience the fruits of your hard work, regardless if you're planning to keep it as your retirement home or a source of additional income. If you’re already considering buying your very first home, then one of the questions you might be asking is, what is the best choice between renting vs. buying for OFWs like you? This article will help you arrive at the best decision.

Rent-to-own vs buying property

For this article, we will take a look at the pros and cons of renting vs. buying for OFWs a property. Before this deep dive, let’s discuss first the difference between the two:

Rent-to-own Properties
This arrangement gives the buyer a chance to get property ownership through a monthly rent-pay scheme. In terms of price, the lessee agrees to pay a “monthly” fee, plus a premium, that has been arranged with the lessor while using or staying on the said property.

Direct buy
From its name, directly buying a property means you pay for a home straight up to get full ownership over it.

The pros and cons of renting vs. buying for OFWs

Both of these arrangements have their perks and caveats and it’s really up to your financial status and preference of paying arrangement that makes one better over the other.

One of the perks of rent-to-own arrangements is that you don’t need to shell out a big amount for a down payment because your monthly pay is going to cover this cost. The downside of this, however, is that you can expect to pay a little higher monthly because your rent will include a premium fee.

For example, the total property price is 1M and you agreed to pay P25,000 every month as rent. Your contract can include you paying an additional P10,000 every month on top of the rental price as your rent-to-own premium for a pre-decided duration—say, two years. The P200,000 you will pay at the end of 24 months will be considered your total down payment, leaving you P800,000 still to pay using other financing schemes to own the property fully.

With direct buying, everything is straightforward. You can purchase a property for its market price—the price can be lower if it’s under pre-selling—and you are free to make do with it after. Besides being less complicated, you can also expect a faster return for your money if you want to turn it into an investment by renting it out. The downside? You'll have to shell out a bigger amount by doing this arrangement.

What’s the right choice for you?

The answer, as mentioned, is based on your available finances and your comfort level of paying. It is an excellent idea to do direct buying if you already have the extra budget for the property accounted for and want to use your home as a source of income by renting it out or even reselling. However, if you prefer not to shell out a huge amount of money and are looking more for a home that you can use as a residence, then the rent-to-own arrangement is a good option.

After you’ve decided on the buying scheme that’s right for you, the next most significant choice to consider is where to buy your property. Johndorf Ventures offers quality homes in Visayas and Mindanao that are perfect for renting vs. buying for OFWs. With over three decades of experience in the industry, we are considered one of the best real estate developers in the region. We currently have nine completed projects in Iligan City, Lanao del Norte, and one ongoing ones in the city. Click this link to learn more about our properties.


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