Buying a house may not be easy for everyone. Moreover, not everyone can afford a house. In such a situation, the option of rent to own has come up as a great help for both buyers as well as sellers. There are various advantages associated with rent to own properties. As a result, many people have started preferring this option.
Advantages of Rent to Own Properties
Some of the major advantages of rent to own properties are as follows:
- No Down Payment:
- Property Condition:
- Fixed Purchase Price:
- Savings:
- Property Value:
- Neighbourhoods and Schools:
There are many home buyers who won’t have the required down payment to buy a property. For them rent to own is a good option. In this option, people won’t have to pay any down payment. However, you will be liable for paying a rental deposit. It is clearly mentioned in the rent to own contracts that a part or full rental payments go toward the down payment of the home loan which the home-buyer finally takes out to buy a property.
While renting the property, the home buyer will be able to get an idea about the condition of that property. Thus, he/she will be able to know what type of repairs are required, if any. Most importantly, while staying in the property, you will be able to get an idea about HVAC, roof and foundation, etc.
While signing on the rent to own contract, the buyer and the seller decide upon a purchase price which gets mentioned in the contract. This price remains fixed. Thus, throughout a certain time period, the price will remain fixed. If you seal the deal within that time period, you will be able to buy the property for that said price. If the contract expires, then the price of the property may change.
In case of a rent to own property, you will not have to take the help of a real estate agent. Their commission can cost the buyer and seller several percentage points. Thus, both the buyer and the seller will be able to save money which they would have otherwise paid to the real estate agent.
In a different situation, rent to own can be beneficial for the buyer or the seller. As stated earlier, a fixed price for the property is decided when the contract is signed. If the property value decreases over the time, still the buyer has to pay the said amount. This will be a profit for the seller. On the other hand, if the property price increases, the borrower will not have to pay the increased price. This will be a benefit to the buyer.
Before you take out a mortgage for the home, those who rent to own, will be able to find whether or not the neighbourhood is good and has schools where their children will attend. If you are not satisfied about these two things, then you can opt out of the contract.
Now that you know all the major advantages of a rent to own property, it will be easier for you to decide whether or not you will consider this home buying option.
Citations:
- Rent To Own
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- License: Image author owned
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