subject: The Benefits of Renting to Own in Real Estate [print this page] The Benefits of Renting to Own in Real Estate
The concept of renting to own a home is not a new one in the real estate world. A rent to own agreement is actually two agreements in one; a purchase agreement and a lease agreement. This agreement allows the tenant to buy the property at a predetermined price, at a later date. Having such an agreement in place means the lessee can reside in the property for a fixed monthly payment, and agree to purchase it on a particular date in the future. Renting to own is merely another way to say "leasing to own". There are many advantages to signing a rent to own agreement, and they are not only limited to the buyer.
Buyer Advantages
The buyer is often given the option to use upfront fees and renting credits towards their purchase.
Buyers with poor credit can use this option to rebuild their credit.
Under a rent to own agreement, a buyer will have a longer lease, and in turn, a lower payment.
The monthly rental fee is locked in for the duration of the contract. Therefore, there is never a rental increase to worry about.
Seller Advantages
The rental market is in somewhat of a downturn, and this allows the seller to start seeing a modicum of investment return,
The seller can begin the process of being rid of a property that may not meet property ownership guidelines.
Once the agreement is signed, the tenant then becomes responsible for all maintenance costs.
Owning a home is a dream of every American from a young age, and this gives more people a chance to achieve this goal. With our economy in its current state, there are substantial rent to own bargains to be had. These days, lenders are not approving home loans at a high rate, making rent to own a great way to get into a home. Many realtors are recognizing this as a burgeoning market and are working with buyers to assist them with owner financing.
With the recent crash of the housing and credit markets, renting to own has become a very popular option for people. The only downside to a rent to own agreement comes into play if you do not purchase the home on the predetermined date set forth in the agreement. If that happens, you will mostly likely lose a large portion or all of your option fees that you put up. This would also negatively impact the seller, as they would not be able to sell their property as planned. All in all, if you are thinking of purchasing a home, then it would benefit you to at least look into rent to own options.
