Is Renting to Own the Best Option for You?

When one couple found out that homes prices and down payment amounts were out of their reach, their hopes to buy their first home had been dashed. That’s when they decided to go a different route with the owners of the home they loved.  They asked the owner to consider a lease-option, where they’d be able to apply their rent to the purchase of the home.  Luckily for them, the Seller agreed, and 12 months later the couple had over $20,000 equity in the home and their down payment was covered.

Renting to own can be a great option to those who just aren’t in a position to make an immediate purchase.  For instance, if you’ve made a recent job change, need time to strengthen your credit or just don’t quite have the money for a down payment, this type of home-purchase plan could really benefit you.

Lease-options are tailored to fit buyer and seller, but they all work about the same way.  The renter will agree to pay the lease for a pre-determined length of time (usually between 1 and 3 years).  An upfront consideration fee, which may or may not include an elevated monthly rent may be required.  The portion over market will go into a fund that will be used for the down payment.  The opportunity will be provided to lock in a price when the deal is made, with the option to purchase at the price at the time the lease is up – or before.

In a steady market, however, it’s difficult to find a lease-option unless the owner really NEEDS to sell.  It’s at times when homes begin to sit longer and sellers begin to lose money that this window of opportunity opens. 

There are some obvious perks to lease-options.  But there are some dangers too.  If you don’t exercise the option to purchase, you will be losing all the money you had invested. And while they do typically favor the buyer, lease options can be dangerous or complicated, which is why it’s important to seek counsel from a professional such as a broker and a real estate attorney to inspect the contract.

If you play your cards right, you just might be able to take advantage of a lease-option and avoid the obstacles of a conventional loan.  If homeownership is a dream of yours, explore your options.  Don’t close the doors.  Renting to own may be just the ticket!

Visit FreeRealtyOnline.com today to list your home for sale by owner at no charge!