Presently, there are several options in buying a property. One of these options is through renting to own a home. It’s an alternative to the usual way of buying a home. This article discusses how renting to own a home works and its benefits.
How it works..
Renting to own a home is a conventional way of renting a property while offering you an option to buy the home within a given time. The owner of the property still has rights over the home till the buyer fulfills an agreement.
Renting to own a home offers buyers without sufficient funds to buy a property. Also, it gives someone with a bad credit score an opportunity to buy a home. Buyers can also decide if they want to get the home on a later date. Typically, the renting period is one to three years. But it depends on the seller’s and buyer’s negotiations.
In a rent-to-own agreement, buyers should know that if sellers fail to pay the home mortgage while it’s being rented, they may lose the house. But renting to own a home still, have many benefits. Let’s take a look at some of them.
A bad credit score doesn’t count
A basic reason why people consider renting to own a home is that they can enter a rent to own agreement with a bad credit score. They can improve their credit status while renting the home. After improving their credit status, they may get a loan to buy the property in the future.
You can examine the home
With renting to own a home, you can live in the home and inspect it before you decide to buy the home or not. In the future, you can decide to leave the home if you find any issues with it.
But you may lose the option fee and rent credit money. The amount will be lesser if you had bought the home and decide to leave it later.
The agreed price during negotiations is fixed. What this means is, if there’s a price appreciation, the price won’t change. Also, the seller can’t increase the prices during the agreed time frame. Although it’s a great advantage, there can be shortcomings if the market responds in the opposite way.
No taxes and less liability
Since you don’t own the home yet, you don’t need to pay home taxes and other fees up front. As a result, you have time to plan for the cost of the property. You also have time to learn about the overall cost of the home before you assume full responsibility.
You have complete control of the Home
You have full control of the property as you pay rent. Also, you’ll get to learn everything about the home, what you need to change and other home improvements before owning the property completely.
With this information, it is clear that renting to own a home is beneficial. But not without risks. Hence, you must be careful. Make certain that the contract lays down all the vital issues in renting the home. Also, it should include an option to buy it in the future. This will save you a lot of issues along the way.