Renting to Own a Home

For a lot of individuals and families, a home may be the biggest investment they will make throughout their lifetime. In addition, a house is also one of the few assets that do not depreciate overtime, compared to a luxury car or the latest flat screen TV. This being said, both buyers and sellers should take the time and effort to carefully weigh their choices prior actually signing with any binding contract. Most people who are looking for a new place to relocate find themselves in a compromised position wherein they find renting a home ideal, yet cannot work on the idea of making that huge investment. For these particular scenarios, there is an in-between option, which is regarded to as "leasing to own" house or condominium unit. This particular real estate service or process also goes by other names, such as lease purchase or rent to own.

Going deeper into the service of lease to own, what exactly is it pertaining to? Basically, this particular agreement depicts that you are renting a property, whether it be a condo, apartment unit or a house, with the intention of purchasing it in the future. The value of the property is set when the rent-to-own agreement is officially signed by both seller and buyer. A down payment is usually requested with the amount varying depending on the agreed upon digits. The payment is collected by a lessor just for good faith. This value is sometimes referred to as an option fee. Monthly premiums will, in some instances, be higher than your ordinary rent as well. The additional value is known as the rent premium. The charges and premium values are credited to the client for the purchase. If the buyer suddenly withdraws on the purchase, all or a portion of the charge and advanced payment is given to the property seller.

There are two kinds of rent to own options you can employ - assignable and non-assignable. An assignable lease to own purchase means that the lessee can provide another individual the chance to purchase the property at the original purchase value. A clever and logical seller will place a Non Assignable notice to guarantee that he/she is protected from the event that the real estate market rises and the lessee isn't in the position to acquire the property. In this given scenario, he/she can sell the property for market price to another interested buyer without having to risk the lessee dealing with an investor.

The process of rent to own entails pros and cons for both buyer and seller of the property. One big advantage for the buyer is that they have time to recover their finances and repair their credit records as they go ahead and rent the property. Another benefit of rent-to-own property for the buyer's side is that they can walk away from a property if they find something seriously wrong with it.

For the seller's part, a benefit would be when the home values start to fall apart, sellers can lock their property with a much higher amount at the beginning of the agreement. Renters who are planning to own, basically treat their homes and living spaces much better since they are planning for the future rather than look for a place to take a vacation once or twice a year.