With rent to own property, you have the unique opportunity to enjoy the benefits of being both a tenant and a homeowner. Here are some important things to consider when renting a house to own, brought to you from the real estate experts at HomeFinder:
A Rent To Own Home is an Investment
In the case of a traditional rental home, the rent money doesn’t generate wealth as an investment into the home, with an appreciation of its value and profit returns when you sell the house. In fact, this is considered one of the main disadvantages of renting a home. But rent to own homes give you the option to invest in a home if you decide you want to purchase it down the road. As the real estate insiders at FinancialWeb explain, “With rent to own houses, a portion of the rent money goes towards the purchase of the home, making it an easier way for most renters to invest in a home.”
Rent to own houses are also a viable option for people who don’t have the standard 20% of the down payment required for a traditional mortgage. With a lease, you may have more creative options for the money needed upfront if you can show you’re able to make payments towards future homeownership.
You Might Not Need a Good Credit Score
Unlike traditional mortgages, you don’t necessarily need a good credit score for rent to own houses. According to real estate expert Justin Pritchard from The Balance, rent to own homes are an excellent way to rebuild your credit and qualify for a loan in the future. “Buyers who cannot qualify for a home loan can start buying a house with a rent to own agreement,” Pritchard says. “Over time, they can work on rebuilding their credit scores, and they may be able to get a loan once it’s finally time to buy the house.”
When considering a rent to own property, it’s important to understand the difference between contracts. For example, lease-option contracts give you the flexibility to either buy the home when the lease expires or move out without incurring any penalties. A lease-purchase contract requires you to buy the property when the lease is up. Once you learn what your options are, you’ll have a better idea of the risks involved with various rent to own agreements.
You Aren’t Responsible For Property Taxes
Another benefit to renting to own is that the landlord is generally responsible for paying the taxes on the property until the balance is paid in full and ownership is officially transferred to the tenant. This makes it easy for the renter to save money for the additional expenses of future homeownership, such as maintenance, taxes, insurance, and repairs. Even better, tenants can enjoy living in the home while they improve their credit score and save cash for other costs.
Equity Grows Faster Than Traditional Mortgages
Traditional mortgages might be the preferred choice among real estate experts, but rent to own properties actually build equity faster because appreciation typically increases in this scenario. This is because tenants are more motivated to make home improvements as they pay the rent to own payments every month. As the experts at FinancialWeb explain, “When it is time to make the final payment, the purchase price may be much less than the home is worth.”
You Have Full Control of the Home
Even before the tenant has paid off the full amount of the house, they have complete control of the home. This means they can make repairs, improvements, or adjustments as they pay the rent to own payments and live in the home. Rent to own homes also benefit landlords because the tenants are likely planning on living in the house for a long time, so the chances are high that they will consistently maintain and improve the home.
Move-In Quickly
With traditional mortgages and home purchases, closing the deal could take months from the time an offer is received until the new owner can move in. With short sales or foreclosed homes, it can take even longer to close. In contrast, people who enter into rent to own agreements can generally move in within a week or two of closing. This is great news for people who need housing in a short amount of time and don’t want to wait around for months to move into their dream home.
Consider these tips for renting a house to own and homeownership can be a real possibility with properties that offer rent to own purchase options. Find the home of your dreams at HomeFinder, the top-rated online portal for rent to own homes, rentals, and homes for sale.
5 Comments
It’s interesting that you mention that won’t have to pay property taxes if you rent to own a home. My wife and I want to become homeowners, so we are thinking about buying a rent to own house. I’m going to look for a good business in our area that can help us purchase a rent to own home.
I would like to rent to own
I am looking for a rent own home and if that is a model thats listef, i have bern looking for a style of house with same design. My hope is to rent to own in the Dixon illinois area. I would like to discuss possibilities. Looking to move in area next couple of months.
I would say that owning a home is much better as compared to renting. First of all you are in-charge of your property you can do whatever you want whether you want to add a new room, a patio or rent out a room. Moreover, you will be able to build equity, and have your own living security, while at the same time you will have much more control over the costs.
I learned from your information that the landlord is the one to pay taxes on the property you are renting to own until the balance is fully paid off. I like how this makes it easier to save money. We want to own a home, but we aren’t quite ready financially. There is also the possibility that my husband may have to leave the state in a transfer for his job. Rent to own seems like a good option right now.