One of the more popular alternatives for new homeowners is often a rent to own property. A rent to own, which is also known as rental purchase, refers to the lease of a property such as real estate for a specified amount of monthly or weekly payment. The difference from a rental purchase and traditional lease agreements is that the lessee has the option to buy the property at a specified future time, usually after about 3 years. Rent to own homes are often considered a good option for individuals who might prefer an alternative to renting homes.

Renting vs Owning a home

Rent to own homes are a wonderful option for many people for a number of reasons. It is not, however, the perfect option for everyone. Consider this step if you:

- cannot purchase a home due to a not enough resources or choice

- cannot take out a home financing loan because of a poor credit history

- cannot yet decide where to settle down

- aren’t ready for the long-term commitment of owning a home

- would like to invest in real estate in the future

- have a steady income

- have an intention to repair your credit

Choosing a lease to purchase property also enables you to enjoy a variety of features and benefits including:

- Faster accumulation of equity – rent to own homes contain a faster equity growth compared to homes purchased or financed using a lender or bank.

- Minimum cash out – essentially, you pay only a minimal option deposit plus the first month’s rental. You avoid paying a substantial down payment, settlement costs and other fees associated with conventional purchases. This is the reason individuals with a not up to ideal credit rating choose this option since they do not need to shell out a lot of money just to have the ability to someday purchase a home. Renting homes is actually more affordable.

- Appreciation profit – in rent to own lease agreements, the sales price of the home is locked in. Because of this , any value appreciation with the property goes to your equity.

- No need to have stellar history of credit – there are very few restrictions in a rent to own agreement. Actually, it’s highly likely you will receive approval considering that the decision is up to the owner and not the bank or creditor. Because this is the case, there’s no need to wait for approval of a mortgage loan.

- Very short move in time – with a conventional mortgage agreement, it is going to take a few months for you to actually move in and begin residing in the home. With lease to purchase properties, you could potentially move in within just a week once you have been approved and also the agreement has been signed.

- Full control of the home

- Even if you have not yet signed the option to purchase agreement, you will be in full control of the home, responsible for its maintenance and improvement.

- No taxes to pay – when you lease to purchase, you aren’t yet legally the owner of the home so there’s no need to pay any property taxes during your rental period.

- Money you pay gets credited – the option deposit you put in will be credited once you decide to buy the home. Part of the rental money will likewise go toward the down payment.