You can have control of a nice home for the same amount you could rent it for. You can have the benefits of home ownership, without all the hassles and liabilities.
Very Low Down Payment
You can often secure a lease option on a house for the same amount you can rent it for. (1% to 5% of the purchase price vs. 10% to 30%)
No Loan Qualification
Most Seller/Landlords do not check credit when they lease option out a property.
Rent Money is Working Toward the Purchase of the Home
Each month that you pay rent, a portion of that payment will be credited towards your down payment or off of the sales price. This is called a rent credit in rent to own agreement.
Faster Equity Growth
Even a small monthly rent credit will pay down the amount owed on the house faster than if you were paying on a loan.
Option Fee Applies Towards the Purchase of the Home
The money you pay for the lease option (called option consideration) on the property applies 100% towards the purchase price of he home.
Profit From Any Appreciation
The sales price is usually locked in up-front. You will have the ability to sell or sublet the property for a profit without ever needing to get a loan.
With Rent To Own You Have Time To Check Out Things
- Time to check out the home (leaky roof, plumbing, heating etc.)
- Time to check out the neighborhood and neighbors (noise, schools, commute, shopping, traffic, that kennel next door)
- Time to obtain the best financing (no pressure, no rush and no bank financing up-front).
No Taxes or Insurance To Pay While Renting To Own
The owner typically pays the property taxes and insurance. You will need a renters policy if you want your contents covered.
No Major Repairs To Make
While you may need to take care of minor maintenance, the Owner is responsible for any major repairs during the lease.
Quick Move In Time
No lengthy escrows or loan approvals. Get in the home of your dreams today, which you can buy or resell tomorrow.
Possible Assignment (Sale) of the Lease Option Agreement for a Profit
If you structure your lease option right you are allowed to assign (sell) your interest in the home for a profit.
Time to repair credit, accumulate a down payment, find the best loan and check out the home and area.
Little or No Down Payment in Rent To Own
Any option consideration/fee (cash up front to move in) and monthly rent credit is credited 100% towards the purchase price and possibly towards the down payment. Some lenders will treat getting a loan on a lease option as a refinance. They look for a 12-month payment record and at least a 5% down payment of the purchase price, which can be in the form of option consideration and accumulated rent credit.
As you can see, the list of benefits for Homebuyers is a long one. That is the reason there is always a demand for rent to own homes.