Glossary

The words we use across Rent-to-Own, Rent-to-Sell, the portal and our agreements — and what each one means.

Rent-to-Own terms Rent-to-Sell terms General property and finance terms

Rent-to-Own terms

Contributionalso: Weekly contribution, Deposit contribution: The fixed weekly amount the homebuyer pays on top of market rent, equal to 50% of the first year's rent. It does not change for the term. If the homebuyer buys, the accumulated contributions are credited towards the purchase price as their deposit.See also: Market rent, Weekly payment
Engagement fee: The fee a homebuyer pays to engage PublicSquare after pre-approval. It is refundable if the acquisition does not reach unconditional.
Homebuyer: The person or household living in a Rent-to-Own home under the agreement, with the option to buy it. In the agreements the homebuyer is the tenant.
Independent valuation: A valuation by an independent, registered valuer at the time of sale. If it is higher than the minimum resale price, the valuation is the sale price.
Info session: The 30-minute call with a PublicSquare representative where the program is explained and questions answered before an application proceeds. Everyone applying attends.
Initial home valuealso: IHV, Acquisition price: The value of the home at the start of the agreement. The purchase price, the contribution and the minimum resale price are all calculated from it.
Market rent: The rent the property would collect under a standard residential lease. Under the program it is reviewed once a year and any increase is capped at 4%, or the maximum allowed by local tenancy law if that is lower.
Minimum resale pricealso: Contracted minimum, Floor price: The lowest price at which the property can be sold to the homebuyer, set by growing the initial home value at a floor rate for each year of the term. At sale the price is the higher of this floor or an independent valuation.See also: Floor rate, Independent valuation
Option to buyalso: Purchase option: The homebuyer's right, not obligation, to buy the home during the purchase window at the price set by the agreement.
Pre-approval: PublicSquare's assessment of a homebuyer's income, savings, rental history and identity, which sets the maximum home value they can apply for. It is a program assessment, not a lender's credit approval.
Purchase windowalso: Exit window: Years four to eight of the agreement, when the homebuyer can exercise the option to buy. Year seven is the expected purchase year.
Rent-to-Ownalso: Rent-to-Buy: PublicSquare's homebuyer program. You move into a home now under a lease of up to eight years, pay market rent plus a fixed weekly contribution, and hold an option to buy the home at a price set by the agreement. Title stays with the owner until you buy.See also: Contribution, Option to buy, Purchase window
Representativealso: Rep: The PublicSquare team member assigned to a homebuyer or investor for the length of their relationship with us.
Setup fee: A one-off fee on an established home, calculated as a percentage of the initial home value. There is no setup fee on a new home from the building panel.
Unlimited Support Feealso: Support fee: A fixed weekly fee paid by the homebuyer for PublicSquare's ongoing support through the term, including the property search, pre-approval, reporting and the transition to a mortgage.
Weekly paymentalso: Total weekly: Market rent plus the contribution — the total the homebuyer pays each week.

Rent-to-Sell terms

Appraisal: PublicSquare's free assessment of what an owner's property would earn under Rent-to-Sell, and whether it qualifies for the program.
Cashflow upliftalso: 50% uplift: The increase in weekly income an owner receives under Rent-to-Sell compared with a standard lease: 50% of the first year's market rent, fixed for the term.
Cashflow yield: Annual income divided by the property's value. Under Rent-to-Sell the income includes the contribution, so the cashflow yield is higher than the gross rental yield on the same property.
Contributionalso: Weekly contribution, Deposit contribution: The fixed weekly amount the homebuyer pays on top of market rent, equal to 50% of the first year's rent. It does not change for the term. If the homebuyer buys, the accumulated contributions are credited towards the purchase price as their deposit.See also: Market rent, Weekly payment
Defined exit: The combination of a purchase window and a minimum resale price, which gives the owner a known period and a known floor for the sale rather than an open-ended hold.
Floor ratealso: Minimum growth rate: The annual growth rate used to calculate the minimum resale price. For houses it steps down the longer the homebuyer stays: 8% for a year-four purchase, 7% for year five, 6% for year six, 5% for year seven and 4% for year eight. Lower rates may apply to apartments and townhouses.
Independent valuation: A valuation by an independent, registered valuer at the time of sale. If it is higher than the minimum resale price, the valuation is the sale price.
Info session: The 30-minute call with a PublicSquare representative where the program is explained and questions answered before an application proceeds. Everyone applying attends.
Initial home valuealso: IHV, Acquisition price: The value of the home at the start of the agreement. The purchase price, the contribution and the minimum resale price are all calculated from it.
Investoralso: Owner, Landlord: The person or entity that owns a Rent-to-Sell property, whether they bought it for the program or switched an existing rental into it.
Market rent: The rent the property would collect under a standard residential lease. Under the program it is reviewed once a year and any increase is capped at 4%, or the maximum allowed by local tenancy law if that is lower.
Minimum resale pricealso: Contracted minimum, Floor price: The lowest price at which the property can be sold to the homebuyer, set by growing the initial home value at a floor rate for each year of the term. At sale the price is the higher of this floor or an independent valuation.See also: Floor rate, Independent valuation
Option to buyalso: Purchase option: The homebuyer's right, not obligation, to buy the home during the purchase window at the price set by the agreement.
Purchase windowalso: Exit window: Years four to eight of the agreement, when the homebuyer can exercise the option to buy. Year seven is the expected purchase year.
Rent-to-Sell: PublicSquare's program for property owners and investors. The owner leases the property to a homebuyer for up to eight years, collects market rent plus a fixed contribution, and sells to that homebuyer inside the purchase window at no less than the contracted minimum resale price. The owner stays on title throughout.See also: Minimum resale price, Purchase window, Contribution
Representativealso: Rep: The PublicSquare team member assigned to a homebuyer or investor for the length of their relationship with us.
Weekly paymentalso: Total weekly: Market rent plus the contribution — the total the homebuyer pays each week.

General property and finance terms

Cashflow yield: Annual income divided by the property's value. Under Rent-to-Sell the income includes the contribution, so the cashflow yield is higher than the gross rental yield on the same property.
Gross rental yield: Annual rent divided by the property's value, before costs.
Lenders mortgage insurancealso: LMI: Insurance a lender requires when a borrower has less than a 20% deposit. It protects the lender, not the borrower, and is paid by the borrower.
Loan-to-value ratioalso: LVR: The loan amount as a percentage of the property's value. An 80% LVR means a 20% deposit.
Settlement: The day the purchase completes: the balance is paid, and title transfers to the buyer.
Stamp dutyalso: Transfer duty: The state tax paid when a property changes hands, calculated on the purchase price. Rates and first-home concessions differ by state. Under Rent-to-Own it is paid when the homebuyer buys, not when they move in.
Title: The legal record of who owns a property. Under both programs the owner stays on title until the homebuyer buys.
Unconditional: The point at which a contract of sale can no longer be cancelled under its conditions, such as finance or building and pest.
Vendor finance: Any arrangement where the seller of a property, rather than a bank, provides some of the finance or defers part of the price. Rent-to-Own is one form of it.

Definitions are general information and summarise the agreements; the agreement wording prevails. See our editorial guidelines.