Rent-to-Own: Is it a Good Option for You?
ShareWhen you are looking at homes for sale, are you passing up the "rent-to-own" homes? Why? These might actually be a very a good option for you. Many people who choose this option are able to find out if they can afford a house, and whether or not they can keep up with the maintenance required on a home they own. There are some other good reasons for renting-to-own, too.
Destruction of Property
Pets and kids can destroy a rental property in a hurry. It is really no one's fault; these things just happen. However, if you know for sure you will buy the rent-to-own property (eventually), then any damage that kids and pets do to the property becomes your full responsibility to fix or repair.
This is technically already your responsibility since you have to assume full maintenance on the home and property when you sign the lease. If you buy the house, you do not have to return it in its "original condition" or pay for it with a security deposit. Ergo, if you have kids or pets, renting-to-own homes are the ideal way to go.
Missing Payments
Missing rent payments usually means you need to catch up or get evicted. Missing payments on your rent-to-own property is a little more serious than that. It shows that you cannot manage or you are not ready for a monthly mortgage payment. It also results in a negative report to the credit bureaus, since rent-to-own properties work to help you establish good credit so you can get a mortgage and buy the property outright.
Failure to follow through on the program means that your credit takes a hit, and then you are not only evicted, but unable to buy a home for a little while longer. Ergo, rent-to-own properties can force you to be more financially responsible than just renting, which is a good thing.
Not Just Paying a Landlord
When you choose a rent-to-own property, you are not just paying a landlord rent. You are working towards the goal of home ownership. In many instances, these properties allow your monthly payments to act as a downpayment on the home. The landlord puts the rent payments in an escrow account for you, and when you have accumulated enough, the sale and transfer of the property begins. Check with your real estate agents or city housing authorities regarding available homes for sale.