A rent to own home is a home that you rent with the intention to buy it one day. The contract you sign clearly states that the rent acts as a down payment for the house. There are a lot of perks to getting a rent to own house like you can renovate the house to your heart’s content and you don’t have to pay any property taxes until you own it. You can move in as soon as the paperwork is settled and the equity of the house builds faster as well. With so many benefits and the fact that you don’t even need a great credit score to get one, you should definitely consider getting a rent-to-own house. In this blog post, we will discuss how you can prepare for a rent to own property.
So, without waiting any further, let’s dive in!
What Goes Into Buying Rent To Own Homes:
Stop renting today and get yourself a rent to own house as there are countless benefits to it. We want you to prepare for it adequately and know all the ins and outs before you decide to get one.
Nonrefundable Upfront Fee:
Also known as the option fee, this upfront fee is something you and the owner of the house agree upon that makes you eligible to buy the house on some date in the future. The fee is negotiable but is usually between 1% to 5% of the actual price of the house. You can ask your rent to own negotiator to get you a deal that does not break your bank and is doable for you.
Going with a reliable rent-to-own company like Stop Renting Albany is your best move since they can negotiate a deal, not only on the option fee but the rent as well, that you won’t be able to resist!
Lease Option vs Lease Purchase:
It is important to keep in mind that there are two types of rent to own contracts. They’re called Lease Option and Lease Purchase. In the lease option, you are given the right to buy the house after the contract time for rent is over, however, you are not obligated to buy the house. You can simply walk away once the contract expires.
In the lease purchase contract, you are obligated to buy the property once the contract is over and the date has arrived. It is important to talk to your contractor beforehand so you can choose the option that suits you right. You can tell by the nature of the two contracts which one is better for you but having a word with your real estate advisor is always recommended.
Purchase Price Agreement:
This is where you and the homeowner decide the purchase price. Your contract must clearly specify when and how the purchase price of the house is decided. In a lot of cases, you and the seller may agree to a price on the house that is much higher than the market value. In other cases, the price of the house is determined on the date when the lease expires so that the owner can charge you the then current value of the house. It is better to set a price before the contract as the appreciation on the property could go very high.
What we have learned so far is that it is crucial to always go through the contract and read all the terms and conditions before you decide to sign it. Having a word with your advisor can go a long way as well since they know what they are doing and what deal is good for you long term. If you made it to the end of this article, we believe you are more than ready to start looking into rent to own homes and grab yourself a nice house! Stop renting today!
For further information and questions, feel free to visit the FAQs section down below.
Frequently Asked Questions:
How does rent to own work with bad credit?
It is easier to make a rent to own work with a bad credit than it is to work it with a mortgage. This is because you rent to own a house with the intention to buy it one day. This helps big time with the credit situation thereby allowing you to be eligible even with a bad score.
Is rent to own safe?
Rent to own is safe since there is no obligation to have a good credit score however, it is advisable to raise your credit score by the end of your contract.
Are rent to own homes more expensive?
It could be more or less expensive depending on the situation. The monthly rent is higher than normal but then again, it also acts as a down payment on the actual price of the house.
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