There are few better reasons why owning a home suits your needs than being comfortable. The obvious question is the means through which you get one. Whether it’s buying or paying little sums over a period of time.
Another means you can add to this is the rent to own schemes. Just how good are they and how do they help you financially. It sure helps to know what you’re getting into because of the implications it could have for your future. Rent to own home is an agreement where an owner decides to sell the property to a tenant for a pre-determined price within a time span.
What it’s going to cost you
A part of your rent is given towards the buying price of the home. Of course, it’s negotiable and you should always stick to what works for you. Note that to boost your credit, you may have to pay a higher rent. The extra money goes to your eventual home purchase.
Also, you must pay an option fee which in most cases is 2-7 percent of the sale price. The option fee is non-refundable and may be applied to the purchase price at the end of the agreement. Again, the option fee doesn’t stop you from monthly rents.
Keep your end of the agreement and lease.
A rental agreement comes with a lease option which gives you the right to buy the home. It’s more often a standard lease valid for a term set in the agreement. If the years specified in the agreement reads 2 years, it means you have a 2-year window to buy the house.
Your rights are almost exclusive as you don’t have to worry about losing the house to a new bidder. Certain standard terms and conditions have to be respected such as occupancy limits. Other conditions abound and a breach of any may see you kicked out and you’ll lose your money too.
A big part of rent to own agreements is maintenance. Tenants usually do the bulk and are responsible for maintenance costs and upkeep. You’ll have no other choice than to keep the house in good shape because it will soon be yours. Major repairs and maintenance are often the responsibility of the landlord. It’s no use being careful about the maintenance and repair requirements after the agreement.
Concluding the agreement
This is dependent on some factors. A Lease-option contract means you may have to get a mortgage or other financing to pay the owner in full. But, you can decide not to buy the house or default at providing financing. You’d be forfeiting the money and the home like a regular rental but without any obligation to buy or keep renting. A lease-purchase contract is rather different because you may be legally liable to buy the property at the end of the lease. It’s a huge pitfall and pales in contrast to Lease-options because it’s less flexible.
Rent to own homes provides a reprieve for those with financial issues who want to own a home. Always study your options and contracts before putting pen to paper. Find rent to own houses near you now!