Are you having trouble finding a house you love at a price you can afford in your dream neighborhood? Are you wondering about rent-to-own homes?
Rent to own is a popular trend of the past that has made a comeback in recent years. If you would love the opportunity to rent a quality home with the possibility of owning it in the future, it’s important to do your research first.
Here’s what you need to know before searching up “rent to own homes near me.”
What Are Rent to Own Homes?
With a rent-to-own home agreement, you will rent a home for a certain amount of time with the option of buying it before the lease expires. There are two parts of a rent-to-own agreement: the standard lease and the option to buy.
One type of rent-to-own agreement is a lease option. With these agreements, you have a right to purchase the home after your lease expires, but no obligation. If you decide you don’t want to purchase the property after you’re done leasing, you can simply walk away.
If you decide to go forward with a lease option, it’s important to have a qualified real estate attorney go through the contract with you before you sign it.
The other type of rent-to-own agreement is called a lease-purchase agreement. This is an agreement between a tenant and a landlord stating that you will purchase a property at a later time. You’ll pay the seller an option fee at an agreed-upon purchase price that will give you exclusive rights to purchase it.
With a lease-purchase agreement, the money you pay in rent can be used toward a downpayment. It can also offset your moving expenses because you will already be living in the home you plan to purchase. In addition, you can build equity while you are still renting the home.
Because a percentage of your rent will be going toward a downpayment, you may be paying slightly more for a rent-to-own home than you would for a traditional rental. You may also be responsible for certain maintenance and repairs. It’s important to go over these details with your lawyer before agreeing to the terms.
Where Do I Find Rent-to-Own Homes?
Rent-to-own homes may not be as easy to find as traditional listings, but you can get them if you know where to look.
A real estate agent with a lot of experience working in your dream neighborhood may be a good place to start. You can also call up brokerages that specialize in rent-to-own programs. These companies work with real estate agents to find homes that typically wouldn’t be available for rent.
Next, the brokerage will set a purchase price for your home and lease it to you. The terms will vary from person to person.
Another way you can pursue this option is to directly contact the seller of a property that’s been sitting on the market for a while. These individuals may be particularly interested in renting because they will be earning money each month as they work toward a likely sale.
Your real estate agent may also know of a landlord who is looking to get rid of a property. You can also ask around on social media and see if anyone knows of such a situation. You can offer to rent, maintain the home, and eventually purchase it.
Still another way to find these types of properties is to find one on the foreclosure market. These owners will very happy to be receiving regular mortgage payments.
What Are the Benefits of Rent-to-Own?
Renting is often considered a temporary situation. Your money is going toward providing a roof over your head, but you won’t be getting it back at the end of the deal.
Ownership, however, is a different story because you’re making an investment that you’re planning on cashing in on down the line. Rent-to-own allows you to begin investing in a home, thus going toward the equity you can earn. While only part of your rental fee may be going toward a downpayment, it’s still more of an investment than you’d be making with a traditional rental.
Rent-to-own is also a great way to move toward purchasing a house regardless of your credit score. As long as you pay your rent during the rental period, your landlord will consider you someone who can be trusted to make regular mortgage payments.
In addition, it’s usually easier to move into rent-to-own homes than it is to move into a traditional home. In fact, you can be situated in your new abode within only a couple of weeks.
Beyond that, your landlord will be paying taxes on your property while you are still a renter. You can save the money to prepare for real homeownership.
Rent-to-own also holds certain benefits for landlords. Firstly, tenants have a bigger stake in the home, so they don’t need to worry about property damage. They also help them to avoid paying pricey real estate commissions in certain situations.
In addition, your landlord may be looking to liquidate their assets in a less-than-ideal market. As such, a rent-to-own agreement can be a mutually beneficial situation.
Moving On In
If you have poor credit, or if you’re simply having trouble finding real estate in your ideal neighborhood, it’s time to consider rent to own homes. You’ll be able to move into the town of your dreams and start investing in the future in no time.
Don’t stop getting smart about rent-to-own now. For professionals specializing in rent-to-own realty in Texas, contact us today.