Rent to Own is not new!

Vendor Finance has been used for selling real estate in Australia for a very long time. In fact, in the 1920s - 1950s, banks were reluctant to lend for residential purchases, preferring instead to finance business because they offered better profits.

 

Since then, vendor finance fluctuates according to social and economic conditions and the availability of bank and non-bank finance.

In World War II, the supply of housing real estate became scarce, unable to meet the demands or veterans wanting to settle down as raise a family, as well as the large numbers of migrants coming to Australia wanting to do the same. This drove up the price of building materials and housing, which meant that saving the money to purchase property without borrowing was no longer feasible.

But who was to provide the finance? Answer – the vendor!

An example, here is a newspaper advertisement for the sale ‘off the plan’ of housing block land near Kiama south of Sydney, dated 1957, where Rent to Own terms were offered.