The Benefits of Renting to Own

Is Renting to Own The Best Option For You?

The American dream of owning a home is still alive and well today. Unfortunately, the recent turn of the economy has put that dream on hold for many people. Renting to own a home is a great alternative that has many benefits, should the potential buyer be willing to invest in a rent-to-own property.

How They Work

The rent to own process works similar to leasing a car. The potential buyer signs a lease for a year to five years with the agreement that at the end of the lease, they retain the option to purchase the home. Though much of the rent is income for the seller, a portion of the rent is applied towards the home as a downpayment.

Benefits of Renting to Own

When renting to own, the purchase price of the home is typically written into the agreement upfront. This means that there are no surprises later on in terms of price. Of course, when looking into renting to own properties, it is important that the buyer makes sure that these terms and agreements are written in print and signed by both parties to ensure that they will be followed through on.

Another benefit of rent to own properties is that a portion of the monthly rent goes into a savings account or other account that will later be applied toward the house as a downpayment. This can make it easier for cash-strapped families to save a down payment. It can also allow a person to save additional money toward their downpayment separately, if desired.

A great deal of flexibility also exists with rent to own homes. With a traditional home purchase, there is no walking away once the paperwork has been signed. The buyer owns the home, even if they decide they don't like the house. However, with most rent to own agreements, should the renter decide they no longer wish to purchase the home, they can simply walk away, no strings attached.

This flexibility can also allow the renter to decide if the home is truly what they want. They can try out the floor plan, learn about the cost and maintenance of owning a home and so forth. This can make buying a home for the first-time buyer much less of a shock.

Finally, entering into a rent to own agreement means that the buyer and the seller have cut out the middle man, better known as the real estate agent. This means that there are no broker's fees, agent fees or any other real estate fees associated with buying or selling the home through a real estate agent. This saves money for both parties.

Of course, these are just a few of the many benefits associated with renting-to-own. Not paying for real estate fees, having more flexibility, saving up a down payment simply by paying the rent and having a quicker move-in date are extremely appealing to many potential buyers and for good reason. Ready to start looking? If you live near Santa Fe ask your realtor to show you some of the great Rancho Santa Fe homes for sale right now. You might be surprised at how affordable some are.