In every form of business, there are a few scam artists who never do the right thing, and this earns everyone in that industry a bad name. However, renting to own, also known as lease option homes are not scams but it’s a method most preferred by those people who want to own a home, but their current financial situations can’t allow them. You can also get multiple articles online from reliable sources that back up the fact that leased option homes are legit and a great way to own a home.
The process of rent to own is straightforward:
- First, the home buyer and the seller typically agrees on the cost of the home, the monthly payment of the rent and the duration the buyer will take to buy the home.
- The home buyer then moves into the home and starts paying rent. During this time, the buyer is also working hard to recreate their credit status, or secure traditional financing to purchase the home. By doing this, the home buyer can attain the sense of pride every homeowner feels when they are working actively toward the goal of owning a home.
- Finally, the home buyer is now left with the option of buying the property at the cost agreed upon in the original agreement
Things To Consider With Rent To Own Home Or Lease Option
As much as renting to own is a solid business, there are various things each buyer should consider. Buying a home is a difficult decision to make, and renting to own is not in any way different. There are various drawbacks:
- In case you decide not to buy the home, or can’t secure some financing, the credit you will have earned will most likely be lost.
- Unlike in traditional ownership, in case you miss a payment, the entire contract will be rendered void. So it’s good to ensure that you read the fine print carefully and ask the homeowner about the default clause in the contract.
- The upfront fee for the rent to own agreement is usually non-refundable. So be certain if you sign the dotted line, that the home is the one you want.
- In a rent-to-own situation, the person renting is usually responsible for most of the repairs.
Some Benefits of Renting To Own
Just as rent to own has its drawbacks, it also has various advantages:
- Families are in a position to move into the homes quickly
- Buyers who have credit issues can get enough time to sort their financial problems.
- The buyers have a chance to explore their neighborhood before committing to long-term mortgage
- The seller has a tenant, and this is a good reason to maintain the property in good shape.
- The seller gets monthly payments that can be used to cover any mortgage payments.
- The seller gets the exposure to a bigger market by considering those people without a good credit score.
Considering all the above, we can conclude by saying that rent to own is not a scam but it’s a legitimate option for the home buyer and sellers as well.