Rent To Own Homes

What Is Rent To Own - How Does Rent To Own Work

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Rent-to-own homes

Rent To Own Homes – What Is Rent To Own

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The process of renting a home for a particular period of time is called rent-to-own or lease to own.

However, in this manner, you could always have the option to purchase the house after that certain period that is being stated in the rent-to-own agreement. The monthly rental payment could serve as an income for the seller and part of that payment would serve as the down payment of the house. This basically explains what is rent to own homes all about. And now you can browse our huge list of rent to own homes and find your new home today.

How Does Rent To Own Homes Work

Home ownership is a great thing, but if you are not ready for the responsibilities that come with home ownership, then you might want to try rent-to-own homes. Rent-to-own allows people to get a feel for home ownership before they get that big loan and lock themselves in for thirty years. This can immediately tell you whether owning a home is the right thing for you.

Rent to own homes

Rent to own homes involves the seller acting as a lender to the buyer. The seller and buyer negotiate on a price the home will be sold at after some time. When you find a home that you wish to rent to own, you can iron out all of the details with the seller. They are often going to be more flexible with you than traditional lenders are. For example they may allow you to choose the day of the month that your payments are due and other factors that can affect your budget.

Rent-To-Own Homes is Mortgage Alternative

Many people that do not have the ability to get a mortgage can rent to own homes instead. This way, you can put down on contract that you want to buy the house and nobody else can purchase it.

During economic downturns many people rent to own homes since getting a mortgage will be hard. Investors like to rent to own homes since it allows them to acquire more properties without the hassle of getting many loans.

If you are looking for rent to own homes, it may be an arduous task since a lot of people do not know how it is done. In this situation, you should talk to the owner and explain to them the benefits of rent-to-own agreement and get them to go along with it.

One good thing about the seller is that, they might have bought a new house already but still it possible for them not to pay the mortgage of their two units simultaneously. Thus this would give them the chance to spend less. It could also be beneficial to the renters since they could stay in the kind of house that meet their standard at once and at a reasonable price.

The Rent-To-Own Agreement

In a rent-to-own agreement (also called a lease to own or just lease purchase option), prospective buyers get to move in a home right away after the deal has been made. Of course, there are certain terms and conditions that need to be met for the contract to be validated.

  • Rent To Own Homes Option Fee

Option Fee – It is a fixed amount that the renter (or the prospective buyer) needs to pay to the seller. It is a one-time, usually non-refundable amount which provides the buyer an option to purchase the house in future. Note that paying the option fee does not constitute any obligation on the buyer’s part, but merely grants him the “right” to purchase the property when the contract expires.

If the buyer ends up buying the house, the option fee becomes part of the down payment. However, if the buyer ultimately decides to not purchase the house at the end of the lease, the option fee simply expires or in other words, becomes the seller’s income.

  • Rent To Own Sale Price

Sale Price – The sale price or purchase price of the house is an amount that the seller and the buyer agree upon before they enter an agreement or in some cases, after the lease expires. In the first scenario, the seller and the buyer agree upon a sale price that is at or higher than the current market price of the house. Once the contract is signed, the sale price is locked in for the rest of the lease term (usually 1-3 years). No matter if the housing prices rise or fall during that period, the sale price cannot change.

On the other hand, in the second scenario, the seller and the buyer agree upon a sale price when the lease expires. The price derived is based upon the market value of the house at that point of time in future.

As is quite evident, most of the buyers prefer to go for the first scenario, wherein they try to lock in a sale price, just in case the housing prices increase in the future.

  • Rent To Own “Rent Premium”

Rent Premium – The term used here is “rent premium” and not simply rent. This is because in a rent-to-own option, the buyer has to pay a slightly higher amount than the typical rent for a property. The extra percentage of each monthly rent payment (called rent credits) goes toward the down payment for the property, if the buyer chooses to ultimately buy it. If at the end of the lease, the buyer can not or does not choose to buy the property, the seller keeps all the money.

Apart from these, the buyer and seller must also agree upon necessary maintenance and repair requirements in the contract. Also included should be clear specifications about who is to incur other costs such as homeowners association fee, property taxes, insurance etc.

At the end of the lease term, if the buyer/renter decides to purchase the property, he/she can opt for a financing option (such as a mortgage) to pay the seller. At that point, the option fee and the extra rent credits earned by the buyer goes towards completing the transaction and settling the sale price of the property.

Rent To Own Homes Pros

Buyers

  • No need for any huge down payments
  • No need to worry about qualifying for a mortgage
  • Buyers get ample time to repair their credit history and improve their credit score
  • Buyers get ample time to build upon sufficient cash for down payment once the lease expires
  • Buyers get to “try out” the house (and the neighborhood) before they actually purchase it
  • By locking in a sale price and contract terms, buyers remove any risks associated with rise in housing prices

Sellers

  • Rent to own process allows sellers to make profit on a house they have been unable to sell off otherwise.
  • Sellers can lock in a house at a higher price than the current market value and get rid of any price fluctuation risk in the future.
  • A buyer is more likely to buy out a house simply because of the option fee and the rent premium that has already been invested in the house.
  • Renters are more likely to treat a lease option house better if they are planning to own it in the future, than if they were to vacate in a year or so.
  • Sellers earn timely rents which they can use to pay off the old mortgage and taxes on a house.
  • Even if the buyer ultimately fails to purchase the property, sellers are left with the rental incomes (rent + rent credits) and the option fee.

Rent To Own Homes Cons

Buyers

  • Since the rent-to-own process is not tightly regulated, buyers can become victims of unscrupulous sellers who have no intention of ever selling their property. He/she can try to impose extreme or unusual contract agreements. e.g. A seller can make the contract void if the buyer fails to pay the rent on time even once and evict them.
  • Buyers “have to” pay the option fee upfront, which can still be a sizable amount. If they don’t purchase the house in future, they end up forfeiting the amount.
  • If the seller fails to pay the original mortgage on the house, it can be foreclosed and the new buyers can be forced to evict.
  • Buyers usually don’t get the rent credits back (the premium they pay on top of the usual rent) when the lease expires, if they fail to purchase the house.

Sellers

  • If the buyer backs out of a purchase when the lease expires, the sellers have to go through the entire listing process again.
  • There is always the risk of a new buyer coming along who is ready to pay a higher price for the same house.
  • If the renter can’t make rental payments, sellers might find it difficult to pay off the old and any new mortgages they might have availed after entering the rent-to-own option. The situation can lead to a foreclosure.

Bottom Line

Because rent-to-own homes is still not very common and not tightly regulated (as stated earlier), both buyers and sellers must obtain assistance of a real estate attorney (on either side) while making a deal. Both parties should be fully aware of their inherent responsibilities and rights concerning the property in question. Overall, while there are many pitfalls to this process, there are plenty of benefits to avail for everyone concerned as well. Sellers get to earn money off the otherwise unsaleable or vacant properties, and buyers are provided with an affordable housing option to become homeowners in near future.

Commercial Heating

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Commercial heating refers to the installed heating systems at multi-level office buildings, industrial complexes, company buildings, warehouses and manufacturing factories. This is also termed as industrial heating.

This is an expensive but worthy investment to a business for it brings several advantages. In a place that welcomes potential customers, commercial heating systems offer them a warm and comfortable environment so they can spend time looking around and purchasing what they need without having to deal with the freezing outdoor temperature.

For venture facilities full of employees, a notable office heating helps guarantee high work spirits and increase productivity. Occupational personnel tend to spend more time performing their jobs and with accuracy if they are comfortable and not suffering from stiff fingers due to the winter, cold air.

Additionally, a commercial heating system that includes heated driveways can reduce the hours needed to de-ice or snow shovelling the pavements during the snowy months. With this, less chance of snow-related accidents would happen.

office heating

Regular maintenance and prompt repairs of commercial heating systems are important for a smooth running business. This is why when heating services are required owners should contact professional and skilled heating contractors immediately for the job.

Since these systems aid in keeping the place warm, it can improve the well being of everyone in the building. A properly maintained commercial heating system may also be what differentiates a satisfied client or industrious worker from an organization of disgruntled workforce.

With a reliable HVAC Service Pooler GA contractor, you can be assured of an efficient heating system that would last for many years more. So, seek the service of one now and arrange for a proper maintenance of your commercial heating system.

Rent to Own Checklist – What to Do Before You Rent to Own

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If you’ve decided that your not going to let your credit score, money problems, or anything else stand in the way of you owning a home then the possibility of owning a home through a rent to own or lease option contract has probably popped up on your radar. Renting to own your home can be a perfect solution for many different situations across the United states but, before you buy please review this checklist of things you should do before you enter in to a rent to own agreement.

Know Your Financial Situation

When you are aware of what your current financial situation is you know exactly how much you can afford for monthly payments, the right size house to look for, and the right areas to search in. The first step in knowing your financial situation is filling out a monthly budget worksheet. You should gather all your bills, bank accounts, statements etc and record expenses and income. During this process you should also consider meeting with approved credit counselors if you have a significant amount of credit card or other types of debt. Once you are aware of your financial situation you can move on to the next step.

Rent to own

Understand the Rent to Own Process

It is very important to understand the ins and outs of rent to own homes before you get into a contract. You should learn all the advantages and disadvantages, obligations for both parties in the agreement, and how the process will work from beginning to end. Equally important is knowing the fees and associated with the rent to own process. You should have a firm grasp on how monthly payments work, rent credits, interest, and other fees that you may incur. The most important part of the rent to own process that you should familiarize your self with is how the contracts work. It is a very good idea to consult with an attorney even if you find a rent to own contract online or otherwise, to ensure that you and your family are safe from fraudulent practices.

Talk With Your Spouse

One often overlooked thing to make sure you do is talk with your spouse. Having mutual goals and guidelines can make all the difference in the world when you trying to make extremely important decisions like buying a house. You should both have a set minimum requirements for your home as well as maximum monthly payments and price.

Know Your Real Estate Market

When it comes to buying home or property whether its rent to own, foreclosure, or outright you should definitely be familiar with your real estate market for your target. You should know what similar homes or comparable listings in the area priced at, what the current trend in the market is (buyers vs sellers), and how much your home could be worth in the future. If you follow all these steps you are should be fully prepared to find the perfect rent to own home. If you are interested in utilizing the largest data base of rent to own homes with owners ready and willing to set up a rent to own agreement visit our homepage to search properties.