Rent To Own Home Investment

Many homeowners are using this rent to own option in order to sell their house. In the current market it can take a long time to sell a property, and some people are not willing to wait. It is an appealing process to buyers who cannot buy a house outright due to low savings or bad credit, but would like to invest in property over time. This method of investment allows for a win win situation for the buyer and seller. Buyers can move in right away, while building on their savings and credit, while homeowners can create an income from their home.

The tenant must agree to put a deposit on the home, also known as an “option deposit”, which is about 1-2% of the total property value. At the end of the agreed upon pay period, the tenant has the option of purchasing the home at a set price. The deposit payment (or option deposit, along with any rent credits), are used toward the down payment on the house. Before the new tenants move in, they are typically screened for employment, credit, and the possibility of purchasing the home at the end of the lease period. If the tenant decides not to purchase the home at the end of the pay period, then he/she will lose their initial deposit and any rent credits (any extra money that was paid towards the set monthly rent).

The benefits of renting to own are enticing. There is less pressure to have good credit or pay a large down payment. This is an attractive feature to many people right now who are burdened with a large amount of debt (or not so good credit) and cannot afford to pay a large lump sum of money in one go. You can get into your new home with little hassle, with the option of owning without feeling saddled to a large real estate investment that you can’t get out of.

Another great benefit is being able to “test” the area to see if it’s a right fit. Although rent is generally higher, there is no pressure to buy, and you can make sure the home is right for you before making a big decision. The only real down fall is that if you decide to walk away from owning the home, you will forfeit your initial deposit.

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