Rent to own is whereby you buy a house through a rent to own agreement. What happens is, you agree with the property owner to rent the house for a specified period before you obtain ownership. This time ranges from a couple of months to several years based on the terms of your agreement. The contract is executed depending on an agreed future sale price, although the sale price can sometimes be left to a future appraisal of the property. Such a deal includes a date on which the renter will purchase the house outright, and it benefits the buyer and the seller.
For many people who cannot acquire a home through conventional means, rent to own Colorado is a viable option for homeownership. Depending on the contract conditions, the seller or the buyer may be responsible for maintenance, taxes, insurance, and repairs. Here is why rent to own may be a good idea for you.
Rent money is an investment.
With rent to own house, a portion of the rent caters for your purchase of the home. That is unlike the conventional means of renting a house whereby the whole rent goes into the landlord’s pocket to supplement his/her mortgage or income and does nothing for the renter. Own to rent houses make it easier for the renter to own a home despite their financial situation.
Purchasing regardless of the credit score
If you have slightly less than perfect credit, rent to own houses may be a viable option for you. It works like a mortgage would since a part of the rent payment goes towards purchasing the home. During the last payment of the house, the landlord can use the credit the renter established with them during the whole time to justify the sale of the property and transfer the deed.
Equity improves faster
Equity improves faster in a rent to own situation when compared to mortgages since the home appreciates faster. As a tenant, you can make improvements to the house as you pay rent. At the end of the contract, the purchase price may actually be less than what the property is worth.
Depending on the agreement’s terms, the renter may not be responsible for paying any taxes since the house still belongs to the landlord. Therefore, the landlord remains accountable for the property taxes until the renter pays the whole balance, and the ownership is transferred. That makes it easy for the tenant to save more as they prepare for the property’s taxes’ future responsibility.
Full control of the house
When you rent to own, you immediately move into the house and gain full control meaning that you can make adjustments and renovations as you see fit. Since you have such a high stake in the property, you won’t waste your resources improving a home you will not live in for a long time. Instead, you are improving a house you will eventually own. On the other hand, the landlord doesn’t have to worry about the tenant damaging the property.
You move in quickly
With rent to own houses, you can move in within a week or two after signing the contract with the landlord.
Although the tenant pays more rent than the conventional renting situation, they do so willingly, knowing they will own the property eventually. However, ensure you read the terms and engage an attorney when entering into a rent to own agreement.