Rent-To-Own Homes and Factors To Consider Before Opting for
Bad credit rent to own homes are all the rage, thanks to the amazing concept behind these deals which can make your dream to own a beautiful home become a reality, regardless of your credit reputation. In these deals, the “consumer” is allowed to occupy a rent-to-own home as a tenant with an option to buy it in the future at the original price. This gives the tenant the benefit of “trial stay” in the house which they would in the long run purchase without having to part with a lump sum amount.
How Rent-To-Own Agreement Works
What normally happens is that after paying monthly rent for a certain duration of time and now you want to go ahead and purchase the house, your total rental payments are deducted from the original price so you only have to pay the remaining amount along with all the other costs. For instance, if a rent-to-own home is going for $80,000 you can choose to rent it for let’s say $700 per month depending on the market rates. After you occupy the house for certain duration of time for instance 3 years and so far everything is good, you may wish to acquire it permanently. What your landlord will do is to simply multiply your monthly rental payments by 36 i.e. (3yrs) and get $72,000.They will deduct this amount from $80,000(the original price) and you have only $8000 standing between you and the property!
Important Factors To Consider Before Opting Into Bad Credit Rent To Own Homes
Whereas rent to own agreements may sound very pleasant, it is imperative that you think twice before you commit yourself to any such legally binding agreements. Many people have rushed to close such deals only for them to realize later that it was a terrible mistake to do so. You don’t want to make hasty decisions that you will regret later do you? The key considerations that you should take into account include;
1) What will Happen In Case Property Values Increase In the Future?
It is helpful to make sure you are well aware of all possible risks with regard to rent-to-own agreements. Real estate trends are highly unpredictable; the home may appreciate during the rental period and this may turn out to be a huge advantage to the owner or a big blow to you. If this is not set up right, the seller may look for ways to thwart you from taking advantage of the buy option since the home is now more valuable than it was. Or they may demand that you pay more. Don’t let yourself in for a rude shock, discus about this matter with them, let them clarify whether appreciation will mean additional payments or a loss for them.
2) Will I Be Allowed To Make Changes To the House?
Although you are still renting your future house, you may want it to represent your tastes as well as lifestyle. Unfortunately, all sorts of changes must be approved by the landlord. This limits your capacity to fully enjoy the living space. Some landlords may allow you to go ahead and make a few minor alterations to the house others may not. Find out what the owner of the house you are looking to rent and maybe purchase later has to say about this to avoid misunderstandings later after you have entered into a contractual obligation.
3) Think about the Monthly Rent
The monthly rent in a lease-to-own deal composes of 2 components. The first component is the cost of the property whose calculation must reflect the actual cost. Then there is the second component-the savings portion. The monthly rent must comprise a cost segment that is realistic alongside a savings segment that’s based on actual numbers as well as the minimum requirements. There should not be any dubious figures in the process!
If you can’t buy a house, you can rent it till you own it, thanks to rent-to-own deals! Bad credit rent to own homes are everywhere nowadays. An easier way to find them is to check on the Web. Owning a home today need not be a hassle. With a lease-to-buy deal, you can set yourself on the path to becoming a proud owner of a beautiful home. You don’t need to worry about your credit reputation anymore.