There are many benefits, but also things to watch out for when it comes to the option of rent-to-own. There are many companies out there, but you have to find the one that will work with you to make sure you own the house at the end of the term, and don’t lose all the money you invested.
Rent-to-own offers an opportunity to those who have bad credit, previous financial issues, bankruptcy, and other such situations. However, although rent-to-own presents a great opportunity, it must be taken seriously and requires much of your commitment.
How does rent-to-own work? You rent the home, maintain it, pay utilities, and spend a little more on rent* per month, but it forces you to save for the down payment because it’s built-in to the monthly payment. A lot of people have a hard time coming up with a big lump-sum of money, and this is a way that can help you. With rent-to-own, you control the property by having the option to purchase it at the end of a pre-determined length of time. The home cannot be listed for sale, as you’ve already made an agreement to purchase at a pre-set price, prior to moving in.
There are two parts to the lease-to-own agreement. Since the property is still technically a rental, you will sign a standard lease that will indicate the monthly rent, and all other rental standard lease terms. The second part is an “Option-to-purchase agreement” which is the agreement that binds the “landlord” to sell the property to you at an agreed-upon price at the end of your agreed-upon term. The term can span over a couple of years. At the end of the term, the landlord has to sell the home to you, however you do have an option not to purchase the property if you should change your mind.
Rent to own is not to be taken lightly. Call our team today and inquire if this is the right choice for you.