Overview

A Homeowner in US commands well over 40 times more net worth than a renter, a number that is strikingly large and continue to grow overtime.

Homeownership is one of the best ways to generate & preserve wealth but achieving this goal has been becoming even more elusive for the society. Recent Increases in Home Prices, decades high Mortgage rates, tighter lending standards and lack of home inventory have made it even harder to achieve an American dream of becoming a Homeowner.

Today, as traditional home buying has become increasingly out of reach for millions of households, alternative methods like Rent to Own (RTO) arrangements or “lease with option to purchase” have given households (Not Mortgage Ready Yet) the ability to choose a home to rent until they are ready to buy it.

Choosing the right product and RTO business partner is foundational to the success of the prospective home buyers. This article compares two of the top-rated RTO platforms in the country — Divvy and Utopia Homes — to help you choose the platform that’s right for you.

While there are many RTO options in the market, Divvy and Utopia Homes are consistently rated amongst the top RTO platforms. Both platforms provide desired features with a robust online tool. However, the differences start to emerge when you look at the economics and overall financial benefits to customers, and how that foundation contributes to time towards mortgage readiness. This article will help you understand the differences between Divvy and Utopia Homes, so you can choose the right RTO partner

Comparison Analysis: Utopia Homes vs. Divvy

To help you understand the difference between Divvy and Utopia Homes, let’s compare side by side the common features:

Summary

Let’s take a deep dive with the help of the example that we took from the websites of Divvy and Utopia Homes. If a customer decides to rent the property costing $301,000 with a 5% home saving feature from Divvy 36-months program today, they will be paying $432/month more than a similar Utopia program ($2,965 vs. $2,533). This high-cost rental program makes the path for homeownership a little difficult for households with very tight monthly cash-flow.

The ‘Earn’ feature of Utopia “Rent, Earn & Own” returns $2,886 more (5% vs. 20% under Utopia Wallet feature) for the customer (Table 2 captures the summary of this) for the entire duration of the program.

In addition, Divvy presents only two home prices for customers: one applicable if customer purchases property in the first 18 months and the second is applicable if the purchase happens between 19–36 months. In contrast, Utopia homes pricing based on 4% annual appreciation for the first year and 1% every quarter thereafter, giving back more in home price appreciation to customer every quarter after first 12 months.

Overall compared to Divvy program, Utopia RTO program provides more favorable features in terms of duration of locked home price, significant saving in terms of low monthly payment and 20% return generating Utopia wallet. The program helps those ‘Not Yet Mortgage Ready Renters’ to move into their Utopia home of choice today and start saving towards eligible mortgage program to buy the same home during the lease period.

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TABLE 3: Details on a randomly selected listed property on Divvy property search page

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