hy You Should, or Should Not, Rent to Own
Real estate has been booming across the country for several years, but not everyone is suited or prepared for a typical home purchase. If you’re looking for ways to save or aren’t quite financially ready to pull the trigger on a new home, you should look to rent to own properties.
Let’s learn the benefits of rent to own, the drawbacks, and how to make sure you’re getting a good deal. If your situation is right a rent to own property might be the perfect property for you.
Why You Should Rent to Own
You Get to Pick the House
Like a straight purchase you get to pick the house you can rent to own. Rent to own homes should be treated like a typical forever home purchase since chances are good; you will end up in that home for several decades or the rest of your life.
Can Still Shop Prospectively
Because of the unique agreement between rent-to-own tenants and owners, you can continue to shop for prospective homes if you aren’t 100% set on a particular property. When browsing rent to own properties you’re shopping more as a potential owner and less as a tenant.
You’ll Get a Better Deal
You can squeeze a much better deal out of rent to own properties since buyers typically pay cash. Cash deals bring down the price since everything needed to complete the transaction is tackled in one fell swoop compared to the fees associated with mortgages and financing options. When your future home’s buyer uses cash, you can expect lower costs all around.
Can Buy Back at Retro Cost
When you enter into a rent to own agreement, you’re locking down prices for the current market. Even if the market skyrockets you’ll lock in your home price at the beginning, which can make a massive difference over a handful of years.
You Can Give House a ‘Test Run’
You can test drive a car before committing, but it’s tough to give a home a trial run before you live in it – not with rent to own. With rent to own, you get to live in the house for several months before deciding if it’s the right purchase for you. There aren’t many other ways you can test a home first.
Can’t Be Pulled from Under You
Entering into a rent to own contract means you have the first choice of refusal on the home. Contracts and agreements can’t be pulled out from under you.
Can Work on Equity While You Live in Dream House
Is your credit score too low to purchase a home outright but you’re tired of waiting to live in your future home? Turn to rent to own. In a rent to own agreement, you can work on building your credit and equity without having to wait to move in. Rent to own is a great option for homebuyers with poor or no credit.
Home Partners of America
Home Partners of America is a powerful program that makes rent to own a breeze. You are matched with a certified agent to represent your interests and find the perfect rent to own match for you. If you’re considering rent to own property look at Home Partners’ A New Path to Citizenship Program.
Why You Should Not Rent to Own
Monthly Rent is Normally Pricier Than Mortgage and Standard Rent
Rent to own monthly rent prices usually are higher (around 5%) than standard rental costs. There’s more to rent to own properties than a tenant-landlord agreement, but those added features and contracts will come at an additional cost to you. The good news is that any extra money is usually going toward your future home’s down payment but if you decide not to purchase you could lose out on what you’ve already paid.
Agents Represent the Landlord, Not You
Buying a rent to own home saves you time and effort since you’re not directly involved in the transaction but not being involved could hurt you down the road. In a rent to own scenario the real estate agents represent the entity buying the property and not you, which means their fiduciary responsibility isn’t to you either.
Max Rent Up to 5 Years
Most rent to own contracts expire after five years. If you don’t have the required down payment or otherwise can’t fulfill your end of the agreement, you may lose both your future home and your rental.
To Rent to Own or Just Rent?
There are several reasons you should or shouldn’t rent to own. Look at the positives, negatives, your individual situation, and other factors to make the right choice. For more answers and information contact The Meissner Group. You can live in your dream home right away with a rent to own agreement, and The Meissner Group can help.