Get approved in just 2 days guaranteed! Serving Ontario, Alberta, Saskatchewan, and Manitoba. Stay tuned for our upcoming expansion!
%20(1).jpg)
Many Canadians now find it increasingly unlikely to achieve their ambition of home ownership in an era of rising loan rates and declining supply.
With its rent-to-own platform, Requity Homes hopes to assist Canadians in bridging the gap between renting and homeownership. The business, which raised $26 million CAD in funding towards the end of December, plans to use 2024 to expand into its present markets.
"We currently purchase homes for an average of $300,000." Suppose that I possess a million dollars. In [smaller] cities, I can assist over three families; in Toronto, I doubt I could assist even one family. This week, Requity CEO Amy Ding stated that the company now has a loan partner for when it needs cash thanks to this funding round.
Requity intended to create a separate investment fund of at least $10 million at the time of the startup's $1.2-million pre-seed fundraising round in 2022 in order to buy properties for its clients. Requity CEO Amy Ding stated that the company now has a financing partner for when it needs to fund real estate purchases thanks to this funding round in an interview with BetaKit this week.
Mike Dobbins, a venture partner at Framework Venture Partners and round participant, will join Requity's board of directors as a result of his reinvestment in the company. Before leaving to create Requity, Ding worked under Dobbins at RBC Ventures, and she described Dobbins as a "true mentor" who played a key role in Requity's development.
Via API interfaces, Requity's platform evaluates credit and banking data to speed up the pre-approval and approval of customer applications. After being approved, clients are given a budget to choose a house, which Requity subsequently buys on their behalf. Following that, clients are able to move into the house while setting away a portion of their monthly "rent" payment to Requity in order to save money for a down payment until they are able to buy the house back from Requity at a predetermined, fixed price.
According to Ding, there are rent-to-own companies in the area that have been there for a while. "In fact, we're the only ones in Canada using that scaling approach to develop a financial product that will increase accessibility to homeownership."
In Canada, home ownership has become increasingly contentious due to recent increases in prices, weaning of the supply, and rising loan rates. In order to restore housing affordability, Canada would require an additional 3.5 million housing units on top of the ones now under construction, according to a September 2023 analysis from the Canada Mortgage and Housing Corporation (CMHC).
This revelation came after the federal government promised to build 17,000 new houses for $2 billion in August 2022, with $200 million going towards a new rent-to-own programme run by the CMHC. Canadian Prime Minister Justin Trudeau stated in the announcement that the project aims to encourage developers and builders to create additional opportunities for first-time homebuyers who are overwhelmed by down payment requirements.
Beyond the Greater Toronto and Vancouver areas, which are Requity's target cities, the company has found that gap. Families and immigrants to Canada, according to Ding, "can't find anything to rent with a backyard" and prefer not to live in condos or apartments.
"To have the greatest possible impact, we are focusing on smaller cities. We currently purchase homes for an average of $300,000. Suppose that I possess a million dollars. In other cities, I can probably help three families, but in Toronto, I probably couldn't help one," Ding remarked.
Requity began serving Thunder Bay, Sault Ste. Marie, Sudbury, and North Bay when it first opened for business in Northern Ontario. The business has recently grown in Regina, Saskatoon, Calgary, Edmonton, Winnipeg, and Saskatoon, among other places in Saskatchewan, Alberta, and Manitoba.
