This question is not uncommon in these tough economic days we are navagating. In saying that overly-used yet simple statement, I have another simple statement - Rent-to-Own (aka -Lease-Option).
What is a Rent-to-Own?
A rent-to-own is a real estate transaction that is the best of both worlds - some may say. At first you rent a condo, single, townhome, etc., for a fixed period of time. The seller gives you the option to buy the property within or before that agreed period of time is up - usually 1-3 years.
When you first begin you and the seller predetermine the selling price. Usually, a portion of your rent over a specified lease period goes toward your eventual down payment. Typically, a tenant would pay slightly above-market rent over the lease period, usually from one to three years, for the right to enter into this arrangement. It's also common for the tenant to pay a fee in "option money," or for the privilege of having the option instead of first month, last month and security deposit.
Now there are stories out there that would scare you into believeing that this never works out for the buyer and in some cases that is true. The key to a successful rent-to-own transaction for the buyer is to deal direct with the homeowner selling the property. Not a real estate agent (in most cases and defintiely NOT an investor that does rent-to-owns for a living. Direct with the seller.
Your next questions is how do I deal direct with the seller and know s/he is telling the truth.
Simple!
>>1 Open your local newspaper or paper of the area your thinking about living in and call all of the For Sale By Owner ads and see if they are willing to do a rent-to-own transaction. Most people have heard of this but don't know exactly how to execute one. Usually For Sale By Owner ads that have been running for weeks are more open to this purchase option.
>>2 Open the same newspaper in your area of interest and call all of the "For Rent" ads - especially the single family homes, town homes and condos for rent. Find out if they are willing to do a rent-to-own transaction. You would be surprised how many landlords do not want to be landlords anymore - especially in this economy. This is good for you! If you call 50 "For Rent" ads you should get at least 2-5 landlords (minimum) that are willing to play ball.
To learn more about rent-to-own please click.
What is a Rent-to-Own?
A rent-to-own is a real estate transaction that is the best of both worlds - some may say. At first you rent a condo, single, townhome, etc., for a fixed period of time. The seller gives you the option to buy the property within or before that agreed period of time is up - usually 1-3 years.
When you first begin you and the seller predetermine the selling price. Usually, a portion of your rent over a specified lease period goes toward your eventual down payment. Typically, a tenant would pay slightly above-market rent over the lease period, usually from one to three years, for the right to enter into this arrangement. It's also common for the tenant to pay a fee in "option money," or for the privilege of having the option instead of first month, last month and security deposit.
Now there are stories out there that would scare you into believeing that this never works out for the buyer and in some cases that is true. The key to a successful rent-to-own transaction for the buyer is to deal direct with the homeowner selling the property. Not a real estate agent (in most cases and defintiely NOT an investor that does rent-to-owns for a living. Direct with the seller.
Your next questions is how do I deal direct with the seller and know s/he is telling the truth.
Simple!
>>1 Open your local newspaper or paper of the area your thinking about living in and call all of the For Sale By Owner ads and see if they are willing to do a rent-to-own transaction. Most people have heard of this but don't know exactly how to execute one. Usually For Sale By Owner ads that have been running for weeks are more open to this purchase option.
>>2 Open the same newspaper in your area of interest and call all of the "For Rent" ads - especially the single family homes, town homes and condos for rent. Find out if they are willing to do a rent-to-own transaction. You would be surprised how many landlords do not want to be landlords anymore - especially in this economy. This is good for you! If you call 50 "For Rent" ads you should get at least 2-5 landlords (minimum) that are willing to play ball.
To learn more about rent-to-own please click.
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