Is Rent-To-Own The Better Option?

By Doherty • May 12th, 2011
Sunset

If you aren’t ready to buy a home yet, you can get started on the process through rent- to – own, also called as a lease option. You as the potential buyer will sign a contract with the property owner regarding the lease. The contract would normally state that you’re going to rent the property at a rate slightly higher than what’s in the market. At any point within your rental period (usually two years), you can opt to buy the property in Davis County Utah at a predetermined price. A share of the above- market rent will be credited back to you if you decide to complete the sale. As often done by others, you can use this portion of the above market rent as down payment. If you decide not to purchase the property, the consequence you’ll have to stand with is paying a higher rent.

What are the advantages?

You can extensively test drive a home you’re interested in buying in Goochland Real Estate. You’ve allowed yourself plenty of time to consider a major buying decision. While mulling over the final deal, the property is available at a locked- in price and with no competing offers.

What about the benefits for the seller?

The prospective buyer rents the home while it remains unsold, so the seller keeps earning from it anyhow, even if there are difficulties in selling it. This certainly favors the property instead of having it sit vacant, prone to vandalism. On the other hand, the home gets occupied, protecting its value, unless the renter destroys it. Rental income from the property can be used to cover costs for mortgage, insurance, taxes and maintenance. The seller would not lose ground even if the buyer decides not to purchase the property.

There are pitfalls you have to be wary of regarding this set- up. Before finally signing the deal, thoroughly educate yourself about the whole process. Some unscrupulous property owners have prospective buyers sign the contract without intending to sell the home. They would instead only want to profit from charging an above- market rent. You’ll lose the opportunity to buy the home if the owner loses it because of financial distress. You’ve basically just gambled away the extra rent you paid. Moreover, you have to find a new place to live in Redmond WA Homes.

See to it that you are signing a lease- option contract wherein it’s your choice to buy the home, not a lease- purchase contract wherein you must buy the home. For assurance, it’s best to hire a lawyer before giving it the final go.

 

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