5 Actions to Take After Starting a Rent-to-Own
Signed a rent-to-own agreement? Five things to do now, paperwork, maintenance, a real budget, a repair fund, and credit repair that actually works.
The closing is the start of the job, not the end of it
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> After closing, do five things: file your lease and option agreements somewhere you can find them, build a seasonal maintenance checklist, start a budget and stick to it, start a repair fund targeting 1%–2% of the home's value per year, and improve the credit profile to get you approved. Homeownership is a maintenance job with a mortgage attached.
Getting the keys is the part everyone celebrates. Nobody explains the first ninety days after, when the paperwork goes in a drawer, a rebate deadline quietly runs out, and the furnace makes a noise you've never heard before.
1. Deal with the paperwork before it disappears
You have had your lawyer review the agreements, you have signed and now you need to ensure to download a copy of the signed agreements for your records.
Scan it. Keep a digital copy and a paper copy. You'll need it for the purchase at the end of the term.
2. Build a seasonal maintenance checklist
Small problems become expensive problems on a predictable schedule. A checklist beats memory.
Canadian winters are why this isn't optional. A $180 furnace service is cheaper than a January emergency call. A $40 downspout extension is cheaper than a wet basement.
3. Create a budget and stick to it
Starting a budget at the beginning of a rent-to-own program is important because the next few years should be about more than simply making the monthly payment, they should be about getting financially ready to own.
A realistic budget helps you see exactly where your money is going, control unnecessary spending, pay down debt, build your down payment and prepare for future homeownership costs such as property taxes, insurance, repairs and utilities and closing costs.
Sticking to that budget also helps create the financial habits a mortgage lender will want to see. The goal is not just to get through the rent-to-own term; it is to finish the program in a stronger financial position and be ready to qualify for your own mortgage.
4. Start the repair fund
The standard advice is to set aside 1%–2% of your home's value each year for maintenance and repairs. On a $650,000 home, that's $6,500 to $13,000 a year.
Most new owners can't hit that in year one. That's fine. Having nothing isn't. Open a separate high-interest savings account, automate a transfer the day after payday, and start with whatever is real for you, $200 a month is a roof fund in five years. The money needs to exist before the water heater fails, not after. Keep it separate from your general emergency fund; the house has its own failure modes.
5. Improve your credit to get approved
There is work to do with credit repair. It isn't just set it and forget it.
If your score is below 700, you need to improve the credit history. This means making payments on time, not taking on more credit and no more having credit checks done. On top of this, it also means paying down current debts so you improve your utilization and your debt to income ratios which all banks will want to see when it comes time to get approved for your own mortgage.
Important to note is that you are are the only one who can do this. No one else can fix your credit for you so don't delay getting the credit repair started. It takes time and starting to work on it in month 47 will not work.
The mistakes that cost the most
Not at the closing table yet?
Clover Properties runs a licensed rent-to-own program across Southwestern Ontario and Alberta — built as a bridge to conventional mortgage qualification, not a substitute for it.
Book a no-obligation conversation at rethinkrenting.com
Clover Properties runs a licensed rent-to-own program across Southwestern Ontario and Alberta, built as a bridge to conventional mortgage qualification. This article is information only, not mortgage, legal, tax or financial advice. Rebate amounts, deadlines and tax rules change — confirm current rules with your lawyer or accountant.
Ready to see if you qualify? Check out our pre-qualification page to start your journey.
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