Rent-To-Own Company Offers Stepping Stone for Home Buyers

According to a recent article in The Sudbury Star, Requity Homes, a rent-to-own company, is expanding its services to help aspiring homeowners in Northern Ontario, including Sudbury.

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Raquel Carbone was eager to get out of Toronto and start a new life with her husband Joe and baby boy in a smaller Northern city.

But while homes were significantly cheaper in the region, the couple couldn’t qualify for a mortgage right away due to their circumstances.

“With my husband having to find a new job and me being on maternity leave, it just wasn’t possible at that time,” said Raquel.

The couple stayed with her parents in Bruce Mines for about half a year while exploring their options, with the two identifying Sault Ste. Marie as the best spot to find both work and a reasonably priced place to call their own.

This was in 2021, with the pandemic still in full swing and housing costs starting to rise.

The Carbones had rented an apartment in Toronto and could have done the same for less in the Sault, but their goal was to sink firmer roots and acquire some equity in the place they called home.

“I didn’t want to get sucked into the traditional rental market, because you’re not building toward anything,” said Raquel.

That’s where Requity Homes — which Joe came across through an online ad — came in. The Toronto-based company, formed the same year the couple was looking to settle in the Sault, specializes in helping families on the path to home ownership through what it calls its “modernized” rent-to-own program.

“People look at rent-to-own the way it was in the 1980s, where it seems a bit sketchy,” said Raquel. “But Requity is a legitimate program that really helps you, and you do end up in your own home.”

The couple found a property they liked in the Lock City — an older brick home, with two floors, three bedrooms, detached garage and a fenced yard — and with Requity’s blessings and financing, were able to move in and start renting until such time as they could take over as owners.

It didn’t take long. “By the time everything was finalized, my husband had gotten a full-time job, I was just coming off maternity leave, and I got a full-time job within four months of that,” said Raquel. “So it worked out really well, and we got a traditional mortgage at the two-year mark.”

Requity CEO Amy Ding said clients typically transition from renters to owners in that period of time, or less.

“My standard contract is three years to get them ready for mortgage, but they can buy the home anytime during the three-year term,” she said. “Right now our average is about 18 months. And the fastest, a new record set in April by a client in Saskatoon, is eight months.”

The company began small, concentrating at first on the Sault Ste. Marie market, but is now operating in four provinces — Ontario, Manitoba, Saskatchewan and Alberta — and recently added Sudbury to its Northern Ontario focus.

While Requity hasn’t yet secured a home for anyone in the Nickel City, Ding said she is “very bullish” about Sudbury and is already working with several families on rent-to-own plans. “We have clients who are in the process of being approved and who will hopefully start active home-shopping soon.”

Ding understands the roadblocks of acquiring a mortgage, having been thwarted herself at one time.

The native of China came to Canada in 2010, graduated three years later from the University of Toronto with a master’s degree in accounting, then found work in her field and started shopping for a home.

“I had no debt, excellent credit, great job, and could put 20 per cent down,” she said. “They declined my mortgage application because I was on a work permit, and said you need to have 35 per cent down. That was in 2013 and it was a very stressful experience.”

Her work included auditing real estate companies and a role with RBC Capital Markets in equity research, through which she “got to know the institutional real estate investors pretty well and how they think about different investment opportunities.”

She also realized through her work that her own, earlier struggle to get financing for a home was not unique.

“It’s even more difficult nowadays for people to qualify for a mortgage,” she said. “And it’s not just newcomers who don’t have the Canadian credit history, but also self-employed individuals, small business owners who have to show 24 months of income history, or families with some hiccups in the past regarding credit. Those are the kind of scenarios where we can come in and give them a stepping stone.”

Ding quit her corporate job in 2020 to launch Requity and is proud to have now helped dozens of families realize their home ownership dreams.

She concedes the rent-to-own model doesn’t have the best reputation, but has set out to do it differently with her own enterprise.

“Our vision from day one has been to offer the most favourable and flexible terms to our clients, while also creating a sustainable business model,” she said.

Requity is distinct in that it doesn’t rely on an array of individual investors — who can make life difficult for clients, said Ding — but instead has two lending partners to provide capital.

“We already have $26 million in funding secured,” said Ding. “Now we just want to leverage that and maximize impact by potentially tapping into the Sudbury market and helping more people.”

“If we had moved up here and rented traditionally until we were ready to buy a home a year or two later, we wouldn’t have been able to because the prices went up so much,” said Raquel. “So it really gave us the head start we needed and that kind of in, into the market, which is tough for a lot of first-time home buyers.”

The cost of inhabiting the home as tenants-on-an-ownership track was also quite manageable for the family.

Raquel said they were paying $1,600 per month — $1,200 in rent, plus $400 that went into a savings account to enable the eventual home acquisition.

“It truly wasn’t unreasonable,” she said. “When we were in Toronto, we were paying $1,900 a month for our apartment. So we were still saving money, while living in a home that would become our home. It just didn’t make sense not to do it.”

Raquel is now 30 and working again as a store manager. Her son Joey is three and she has another child on the way. The house she’s living in is 100 years old, but she loves it, and so does her hubby.

“He said he wanted a garage and a basement, and I said I wanted a fenced-in backyard and two storeys,” she said. “You do have to love the charm of an old home — there are bumps, there are cracks, nothing is level — but there is so much character. So definitely worthwhile, and there’s no way we could have done this in Toronto.”

Ding was a pleasure to work with throughout, she said, providing guidance right through to the stage of getting their own mortgage.

“This isn’t a mafia boss or slumlord where you might never actually get your home,” she said. “This is a reputable company that follows business ethics and a good person to work with. So if they are able to expand into Sudbury and help people, all the power to them because we have such a beautiful home, and it’s thanks to Requity.”

To learn more about the rent-to-own company, visit www.requityhomes.com, email info@requityhomes.com or call 705-482-7733.