By Sohini Bhattacharya

In 2013 Leigh Ann entered a rent-to-own (RTO) program through Clover Properties, an Ontario-based RTO company. She ran a day care from her home but had accumulated too much debt and not enough down payment to qualify for a mortgage.

“Because I was self-employed, the banks had a hard time looking at us. We didn’t have our down payment. We found it difficult to save on our own,” she says while seated on the sun-drenched backyard deck of her new home in Barrie, Ont.

During the standard three-year term of her RTO, Leigh Ann worked hard to improve her debt ratios and saved up a bigger down payment than she expected. The banks qualified her for a mortgage within two years in 2015 – a year ahead of her schedule.

Leigh Ann is one of several homeowners who successfully completed Clover Properties’ RTO program and are part of the company’s 92 per cent success rate. While raising the bar for structuring RTO deals, Clover Properties has helped over 150 credit-challenged families become mortgage-ready and enter homeownership in a real estate climate that is increasingly pricing families and millennials out of the market.

Rachel and Neil Oliver
Rachel and Neil Oliver

When Rachel and Neil Oliver, owners of Clover Properties, started their RTO business 7 ½ years ago, they had regular nine-to-five jobs and a two-year-old. RTOs presented them with a lucrative way to generate passive cash flow, without the headaches of being landlords. At the time, there were few RTO specialists in Ontario, so the Olivers wanted to plug into those established systems.

They soon noticed gaps in these established systems – gaps that have earned RTOs a dubious reputation.

“We were seeing that people were doing no-money down RTOs, which results in 90 per cent failure,” says Neil. With zero-per-cent down payment from home buyers, investors take on a huge risk. Investors offset those risks by charging home buyers hefty monthly payments. “While that’s doable in month one, by month six, tenant-buyers start to feel the money drain and back away from the deal. That was gap one,” says Neil.

Exorbitantly high home appreciation rates were the second gap that the duo identified. RTO companies were charging eight to 12 per cent, when the market was growing at an average rate of three to five per cent. Homes weren’t catching up to such high rates and tenant-buyers weren’t able to exit RTOs into homeownership. “So, we started tweaking the model at our end,” says Neil.

He also observed that RTO numbers were being driven up by investor greed. “At Clover Properties, we structure RTOs from a realistic, robust and a win-win perspective. The real estate brokers get their commission, the mortgage brokers get their deal, we get paid by the investors, because the investors make their returns. Moreover, the homeowners earn the equity they build on the house. They’re not being charged 12-per-cent appreciation, and they own an asset at the end of the deal,” he says.

Affordability is another gap in the RTO system, says Rachel Oliver. Often prospective homeowners underestimate their debt load in comparison to their combined family income. “They have a hunch and an appetite to buy homes upwards of $500,000, when their household income is $60,000. This is a big miss for real estate agents who don’t necessarily tap into the affordability criteria. The real estate agents we work with steer homebuyers through Neil’s rigorous underwriting process, where he objectively mimics the mortgage rules, identifies their true affordability and relays that information to the real estate agent. This way, the agent isn’t wasting their time showing properties that homebuyers salivate for but can’t afford,” says Rachel.

Janet Esau
Janet Esau

Janet Esau, a sales rep with Century 21 Leading Edge Realty in Stouffville, Ont., says that with only a few credible RTO companies in Ontario, the industry hasn’t kept up with the viability of RTOs. In part that’s due to scamsters making news in the market, but more so because the brokerages haven’t done their due diligence about the growing need for RTOs, she says.

While homeowners and millennials are becoming more aware about RTO opportunities, real estate agents aren’t following suit. She says the 70,000 Realtors in the province are competing for the same properties in the same market, making the competition fierce, forcing new agents to knock door-to-door and cold call in the hope of making a deal.

“The stat that we were given was that for every 100 doors you knock, you may get one. That’s not one deal – that’s one response, one person who wants to just talk to you,” says Esau, who specialises in RTOs with Clover Properties. Now into her second year as a real estate agent, she says she recognized the potential of Clover Properties’ “people first, property second” approach and works closely with Neil Oliver to help struggling families own their first homes.

Since January 2017, Esau has earned commissions on 19 closed RTO deals through Clover Properties.

The Olivers’ hand-holding approach to RTOs have it defined down to a science. They’ve literally written the book on the subject, titled Rent to Own Essential Guide for Homebuyers: The Key to a Fresh Start and Richer Future.

“Good Realtors pride themselves on developing relationships with their clients. If you’re a Realtor, focussing on buying and selling, don’t try to do RTOs on the side. Bring in a RTO specialist,” says Neil.

The company is inviting Realtors to leverage from their RTO model, their vetted network of investors and their expertise at no charge. Their pre-screening process ensures that investors and homeowners understand the basics of their RTO process, they say.


  1. I agree with the advice of having an RTO specialist handle the RTO business, as most Realtors do not seem to have the knowledge or experience of the structure of the deal or the connection to vetted investors that can hold the mortgage initially. I have focused on the RTO business and have kept the appreciation rate at 5% each year and this has proved to be a real boom for those clients that entered into my standard 3 year RTO in the past 5 years. They are finding their home value is well above the agreed upon purchase price. Also, we look at credit capability and mortgage affordability in the proposed 3 years as we truly want the Tenant to be able to purchase the property at the end of the 3 years and that means we need to guide them to improve their credit to be able to qualify for a mortgage then.

  2. As a mortgage broker who has been asked to getting funding for these deals I have been extremely frustrated by the lenders. Although the insurers say this is a good option for home ownership they also have requirements that must be met for them to consider an RTO valid. Glad to hear of Clover. Too many RTO’s leave the client to themselves and without follow up and due diligence these contracts fail. Seeing families hurt is not nice to say the least.

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