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September 1, 2021

Finance

Real Estate Talk: Is Rent-to-Own Housing a Good Idea?

Today, the average home has increased by 32.6%. If you’re in a major city, it has increased by up to 43%!

All of these startling numbers might have you wondering whether you’ll ever get to buy your dream home. The good news is that it’s possible with rent-to-own housing!

What is rent-to-own housing and is it worth it? Read on to explore the answers to these questions and see how beneficial it can be today.

How Does Rent-to-Own Work?

A rent-to-own agreement will look similar to a standard lease. It’ll talk about how long your lease is as well as standard terms and conditions which you can read more here.

This can include no pets, no smoking, occupancy limits, etc. If you violate these terms, they can kick you out. It can also cause you to lose the money that you’ve put toward your future home.

If you choose rent-to-own houses, that means that once the contract is up, you can buy the home. This means that if the lease states it’s for 3 years, then you’ll be able to buy the home for the 3 years during this time. You don’t have to worry about someone else taking it from you.

You’ll have to pay what’s called an option fee. Once you pay this, it’ll go toward the home’s purchase at the end of the term. If you decide not to buy the home, then you’ll lose that money.

There’s also a difference between a lease purchase and a lease option. A lease purchase means that you have to buy the home, and if you don’t, then the seller can take legal action. Whereas a lease option gives you the choice of whether or not to buy the home.

The Benefits of Legitimate Rent-to-Own Programs

First, it gives you time to save up money. Second, it lets you lock in the purchase price without having to worry about it increasing.

Rent-to-own houses also let you build equity over time. You’ll also be able to move in right away.

Is Rent-to-Own a Good Idea?

Keep in mind that there are cons such as the home’s value not increasing. Also, they might be unregulated deals depending on your location.

If you can’t qualify for a mortgage, then you can’t buy the home. This means that you’ll still need to qualify for a mortgage loan. You’ll also need to save for a down payment as well.

If you need time in order to save a down payment or increase your credit score, then rent-to-own might be a great option for you. Take a look at the current housing market and your financial situation to decide if it’s right for you.

Exploring if Rent-to-Own Housing Is Right for You

After exploring this guide, you should have a better idea of how rent-to-own housing works. Take your time deciding if it’s right for you and your family.

Would you like to read more real estate content? Check out our other articles today.

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