Tanya Westthorp July 9th, 2009 RENT-to-buy schemes, usually associated with televisions or white goods, are now being used by Gold Coast families to help them secure a home of their own. The popularity of renting to buy or own homes has skyrocketed since the global economy took a nosedive last year. As banks tighten the purse strings, making it harder for people to borrow, Gold Coasters have decided renting to buy or own houses is the way to go. The scheme allows renters who might have trouble getting a bank loan to enter into an agreement where they lock in a purchase price and rent a house for two years while paying extra to build enough equity to be in a stronger position to get a bank loan. Rentovation director Brett Mudie sells houses on the Gold Coast using the popular scheme. He said about 600 people were on the list to be notified of new offerings. "The inquiry rate has increased in the past year," said Mr Mudie. "People can move in and pay each week -and that goes toward owning a home rather than renting. "It just gives people time to build up that payment history and get together a decent deposit to get a mortgage." He said buyers often paid a $10,000 deposit which was taken off the price of the house, paid rent and then an 'option fee' on top of that -- a portion of which went toward paying off the house. It was similar to a paying off a bank loan, without the applicants having to go through the rigorous process of getting approved or denied by a bank. Mr Mudie said homeowners having trouble selling their properties were opting to sell with the scheme. According to 2006 Census data, 363 Gold Coast residents are buying homes through a rent-to-own scheme. Daniel Espinosa and his partner Michelle Campbell secured a $420,000 Upper Coomera house through the scheme last November. At the end of next year they will have built up $30,000 equity and be ready to apply for a bank loan to finance the remainder of the mortgage. "We had trouble getting a mortgage because of the stupid financial mistakes you make when you are young and it comes back to bite you on the rear," he said. "The most I was told I could borrow was $190,000. That wouldn't get me a shack in the middle of nowhere." Mr Espinosa, a chef, and Ms Campbell, who works in administration, pay $720 a

week -- $555 towards rent, $100 off the price of the property and the rest is taken up by other fees. Mr Espinosa said although they were paying more than they would to rent, it was a worthwhile investment. "It's really a great way to get your foot in the door," he said. Location: AUSTRALIA