At Key we are changing how you own real estate. We’re creating a world where real estate is a source of freedom and prosperity for everyone, where you can start building home equity years sooner. 

We often get questions around our model and one of the most common questions is: “Are you a rent-to-own model?” 

Key is a co-ownership model for homeownership, where you become an Owner-Resident for starting at just 2.5% of the value of your suite. Should you decide you want to buy the whole suite, after the end of the 3rd year, you can take on a mortgage, but there is no obligation. The biggest difference? With Key, you’re building home equity from day one. 

While both Key’s co-equity model and rent-to-own models are working towards making homeownership more accessible, there are some very key differences. 

How does Key’s co-ownership model work? 

At Key, we provide the opportunity to co-own a home to live in and build equity with an initial, small down payment starting at only 2.5% of the home’s value and no need to qualify for a mortgage. Think of a hybrid between renting and owning. Your monthly payments are comparable to market rent with a portion of the payments serving to increase your home equity over time.

Your initial equity contribution can be cashed out, after the first year and with only 75 days’ notice. When you are ready to move out–-if the value of your suite has appreciated–so will your home equity investment. Plus, the amount of equity you co-own of your suite provides a benefit that helps to reduce your monthly payment. 

Key also offers a Co-financing benefit, for every $1 invested, Owner-Residents get another $1 in leverage so you can build more home equity, faster. Unlike a mortgage, you enjoy the benefit of leverage without taking on the debt. The only cost for this benefit is a small interest charge.

Try our calculator to get a better idea of how our co-equity models works and what it would mean for you.

What is a rent-to-own model? 

Rent-to-own models are essentially agreements that allow you to rent a property for a specific length of time with the option of buying the property before your lease runs out. You pay rent throughout the lease and typically an additional premium that will go towards your down payment. 

There is a timeline with rent-to-own in which a person needs to own the unit in full, which means you are typically on the hook for nonrefundable upfront fees, ranging between 1-5% of the purchase price. Also, depending on your contract, you may also be on the hook for all the maintenance and property repairs throughout your lease (if you’re wondering, homeowners should be prepared to set aside 2-4% of your home’s value every year towards repairs and maintenance). 

When your lease agreement runs out, you’ll need to qualify for a mortgage and put together the money for the down payment. Should you decide not to purchase the property, you may actually lose all of the equity (money that would have gone towards the down payment) in the home

If you think that co-ownership might be the right homeownership solution for you, you can learn more about Key’s model and how it works and how it compares to renting.