In today’s booming real estate market, there are many different types of properties for sale, and among them are rent to own homes. A rent to own home can be a great way to acquire home ownership without having to deal with banks and other lending institutions. Rent to own homes can basically help you get into a house without having to go through all the hassles that are usually involved. So if you’re considering the prospect of a rent to own home, get ready to take some notes!
Rent to Own vs. Lease-option Agreements
Despite the fact that most people tend to use the terms rent to own and lease-option agreements “interchangeably,” there are some significant differences you need to be aware of. With a rent to own option, you typically make an agreement with the owner to allocate part or all of the rent money towards the down payment of the home. As the renter, you also agree to purchase the home at a certain date in the future (usually 2-5 years down the line), with the money that was initially put aside as the down payment.
With lease-option agreements or a lease with option to buy, you have to sign a lease agreement, which is typically for a shorter amount of time. You also have to pay a sum in cash to the owner in an agreement to buy the home at a later date for the agreed-upon price. The difference here lies in the operative word, “option” because you can either choose to buy the home or back out if you want.
Advantages of Rent to Own Homes
Homes for rent can be appealing to people for many different reasons. For example, some people opt for a rent to own home for the purpose of trying out a neighborhood prior to making a full-fledged commitment to purchase a home in that area. Others may find the idea of rent to own homes attractive because they are still uncertain about where their final career path with lead them.
If you’re someone with less than perfect credit, you can also benefit by opting for home rental. When you lease a rent to own home that you want, and make your payments in a timely manner, you can improve your credit score. Rebuilding your credit can eventually help you to qualify for a home mortgage loan. Rent to own homes can also be the perfect solution for those who have gone through bankruptcy, divorce or any other types of financial hardships that may prohibit them from meeting stringent requirements put fourth by banks and other lenders.
Rent to own homes are also a great way for you to build equity before you even own the home. While you will have to take responsibility for minor maintenance work as a renter, such as fixing clogged drains, broken windows or painting touch-ups, the owner will still be accountable for all the major repairs until the sale is final. A final perk of rent to own homes is the fact that your future purchase price is agreed upon at the time of your deposit payment, and therefore never changes even if the value appreciation does.
So if you’re currently a renter who’s tired of paying your landlord every month and getting absolutely nothing back, perhaps it’s time that you consider owning your own home and reaping the rewards that along with it. Rent to own homes can make your dreams of home ownership into a reality.
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