The New Trend: Rent to Own
During traditional times, the seller and buyer complete the purchase usually after agreeing to all the terms and conditions of the house or property. In modern times, Rent to own is a big hit for everyone who cannot afford to purchase the house immediately, thus, it is giving the buyer an affordable option in purchasing a house for their future. The transaction can only take place once the buyer or renter has decided.
A so-called “rent-to-own transaction”, which is also known as “lease option”, usually starts by making a contract. Agree to certain terms, both the buyer and seller, and all the terms can be changed to fit everyone’s needs. You can request certain points before signing an agreement depending on what’s important to you (whether you’re a buyer or seller).
Buyers who expect to be in a stronger financial position within a few years can be attracted to Rent-to-own terms, here are some reason why:
Testing the Waters
Buyers need to check and weigh a lot of things before purchasing a house. A lot should be considered before committing to owning a new property. Buyers should learn about issues with the house, the neighborhood, and any other problems before it will steal the essence of having a nice and peaceful home before it’s too late.
Purchasing with bad credit
Over time, they can work on rebuilding their credit scores, and may be able to get a loan once it’s finally time to buy the house. Since buyers have an option, those who are not granted a home loan due to bad credit, they start buying a house using the rent-to-own agreement.
Buyers always have an option to back out anytime if the home prices deflate, although it will depend on the payment they agreed under the terms of the agreement. Buyers can get a contract to buy at today’s price with the purchase taking place several years in the future.
Buyers can save money in a savings account and just use those funds—avoiding the pitfalls of rent to own, and providing the ability to buy any house.
On the seller’s perspective, they can also benefit from rent-to-own arrangements:
An Invested Renter
The renter/buyer is already invested in the property and is very much interest in its maintenance. The one who is responsible for taking care of the property is the potential buyer. Renting out your home can be stressful because renters can be hard on your home — particularly when they don’t plan to be there long. However, because you are renting to someone who has a long-term interest in your home, there’s a better chance they’ll take care of it.
Things buyers/sellers should observe, that you can earn a rental income even while moving forward in selling properties. If you don’t need to sell the property immediately and use the money for another purpose. More renters who need slow-going financing will be attracted to the home and they will typically pay a premium amount because of the exclusive financing terms.
Interested Buyers increase
You can market to renters who hope to buy in the future. If you’re having trouble attracting buyers, not everyone has good credit and can qualify for a loan, but everyone needs a place to live.
People may be willing to pay extra for the opportunity, you can ask for a higher sales price when you offer rent to own.
Nothing is perfect, and that includes rent-to-own programs. These transactions are complicated, and both buyers and sellers can get some unpleasant surprises but don’t lose heart in finding the perfect home or buyer of your property.