Amid high home prices, tough buyer competition, and strict qualification conditions, bridging the gap between a house you like and one you can afford becomes almost impossible.
Rent to own homes can be an alternative to home ownership in this rigid real estate market. This arrangement offers the best of both worlds – buying and renting.
But is investing in rent to own homes a good idea? Here’s a rundown of what rent to own homes are, how they work, and what to watch out for.
What Are Rent to Own Homes?
Rent-to-own homes are special agreements where you get to buy a home after renting it for a specified time. The rental agreement for rent to own homes includes an option or obligation to purchase the home after you rent it.
Typically, you pay more than the average rent to own a home. The excess portion of your monthly rent goes towards the down payment for the house. When your lease ends, the saved money is applied to the home purchase if you decide to buy the home.
Rent to own homes can be a suitable option if you lack the funds for an upright downpayment. Renting a home with the intention of buying it will give you time to save for the downpayment and improve your credit score.
Rent to Own Homes Benefits
- Save cost on repairing
- Option to buy or move
- No need to face buyer competition
- Plenty of time to save for a down payment
- Time for improving credit score
- Flexible and negotiable buying terms
- No need to worry about the mortgage right away