Things to Consider Before Getting a Rent to Own Property
Buying a home is an investment. It’s also a solid financial decision for those looking to establish their roots and create stability in the long term. Renting to own (or “lease purchase”) could be considered as another option, but it can come with some risks if not done correctly. You can click here to learn more about this purchase. In this article, we’ll explore what you should consider before entering into one of these agreements and why renting might not be your best choice after all!
The Term of the Rental Agreement
If you want to rent to own a property, you must understand the rental agreement term. It is typically for a set number of years, and if you don’t want to purchase the home at the end of that time, you will need to move out. Make sure you are comfortable with this commitment before signing anything! Moreover, if you are looking to establish roots, this might not be the best choice for you.
The Monthly Rental Rate
The rental rate is another aspect you should consider before entering into a lease-purchase agreement. It’s essential to make sure you can afford the monthly payment, and it does not put too much of a financial burden on your shoulders. If this means spending less time at home, then so be it! If one of these two factors isn’t in your best interest, renting might be the better option.
The Property Purchase Price
Like with any other purchase, the property purchase price is an essential factor to consider. Make sure you know how much money you will need to put down to buy the home and whether or not that’s something you’re comfortable doing. If it’s not, then this option might not be for you.
Credits From the Rent Paid Towards the Purchase of the Home
If you decide to rent to own a property, any money paid towards purchasing the home must be credited back in full at some point. If this doesn’t happen and you’re forced out for whatever reason, then your efforts will have been useless! Make sure your agreement includes this type of credit before signing anything. If you’re looking to purchase a home in the future and want to start building equity now, consider a rent-to-own agreement. These agreements typically last between two and four years, and at the end of the term, you will need to decide
if you want to purchase the house or move out. Make sure that this commitment is in your best interest, and remember, monthly rental rates are typically higher than they would be for a traditional lease.
