Are Rent To Own Homes a Good Idea?
Is it better to live in rent to own homes, rent, or buy our homes outright? The answer, like many questions of this nature, depends on a lot of things.
How Do Rent To Own Homes Work?
Contract There are two separate contracts to sign: – Rental agreement – A lease option to purchase
Rental Agreement
The rental agreement is similar to a standard lease with the rent specified, but the difference is the agreed-upon term to purchase the home potentially. Typically this ranges from one to three years after the agreement begins.
Lease Option/Purchase
Something else to consider in the agreement is whether or not the home is a lease-purchase or lease-option. When you first read about the two, they sound similar, but there’s a BIG difference to pay attention to.
How Much Rent Do Tenants Pay?
Everything in life is negotiable. That also applies to the rent to own homes option. Make sure you address this with the owner before signing any agreement. It’s not uncommon for tenants to pay 15-20% more in rent as well. But remember that this “extra” amount will be credited toward the home’s future down payment.
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