You may have heard of rent to own in terms of appliances or even car purchases, but you may not know that rent to own homes also exist. In today’s tough housing market, there are many reasons why rent to own listings are viable and even a good option for many people who want to get into a house and own their own place. Here are a few reasons to consider rent to own real estate.
No Mortgage Qualifying (Initially)
When you get into a rent to own deal, you do not have to go to the bank and get a mortgage right away. Given today’s market, qualifying for a mortgage can be very tough. If you have anything negative on your credit history or do not have enough money to use as a down payment, you can kiss your current chances at a mortgage goodbye. When it comes to rent to own homes, you do not have to worry about whether or not you will qualify for a mortgage because you will not need one right away.
Renting a home and working towards ownership is like leasing a vehicle. The seller will give you the right to buy the house for a certain amount while you are leasing. In the meantime, a portion of the money you put into the home in the form of rent will go towards the purchase price.
If you decide that you do not want to buy the home after the agree upon period is up, you do not have to move forward with the purchase. You will lose the rent credits you paid on the house, but you will not have to sell the home in a bad market and you will be able to move on with no strings attached. Renting the home first will give you a chance to discover any flaws the house might have. If you find that there are too many flaws or that maintenance is too much for you, you can back out of the deal once the time period is up.
Early Home Ownership
If you are used to renting an apartment or home, rent to buy is a great option for your next home. You will still be renting so the cost will be affordable, but you will have the freedom to do things to the home. You will maintain the yard and other aspects of the home just as you would if you were the home’s owner. You will get a good feel of home ownership and will really start to take advantage of everything that entails.
When you buy a home using a Realtor, you have to have a down payment. Then you have to pay monthly mortgage costs and insurance and all sorts of other things. You may not even realize how much the costs will add up until you are in the thick of it. When you rent to own a home, you will pay the monthly rental fees and you will know what those fees are up front. You will likely not be liable for insurance costs until the home is yours. And you will not have a huge down payment to consider. You can use the months or years in your rented home to save up to actually purchase the home at the end of the agreement.
If you do not have great credit, use the rent to own method to build equity towards a home. You will not have to worry about your poor credit history and you will begin to repair it with a new track record of payments and equity. You do not have to involve a bank or finance committee and can rely fully on your own income for the deal to be beneficial.
While there are many advantages to renting a home and moving towards ownership, you will want to proceed with care. Make sure you have an attorney look over any paperwork that is required before you sign it. You want to make sure the owner is not tricking you and does intend to offer to sell the home to you at the end of the term. As long as you understand and agree with all of the terms, rent to own homes can be a good investment in today’s housing market.
The next time you see rent to own signs out in front of a house, look into the terms a bit further. Now that you understand a bit better what rent to own homes are all about, it might be an option for you for a number of different reasons. With today’s difficult real estate market, getting into your dream home any way you can is a priority. Consider searching free rent to own home listings to get you to home ownership faster than you would land in that position otherwise.