Secrets You Should Know About A Rent To Own Home Deal

Which means you are sick and tired of renting. You want to own your own property, but you do not have a downpayment. Without doubt you’ve heard of “the perfect solution” – rent to have. But is it really as perfect as everyone says – hardly. There are several secrets about rent to obtain properties you need to find out about. They are most overlooked elements of a rent to have deal. So why don’t we find out the truth about lease to possess homes.

How Rent to Own Works

So this is the way it operates. You’re renting a house together with the choice to buy. You’ll have a lease that will typically last between 2-3 years. Owner will likely require that you put some form of upfront down payment or option fee. It’s usually 1 to 7 % from the agreed upon final cost. As well as the rent, you will be paying what is known a Rent Premium or Rent Credit. This extra amounts put on the cost of the home.

Let’s see how a Salt Lake City, Utah rent to obtain works out. By January, 2017 the median rent for the 3 bedroom, 2 bath house in Salt Lake City is $1,500. The additional amount that you’ll pay towards the purchase is negotiable. Generally you are very likely to pay for 20 to 50% higher than the market rent. In the interest of argument, let’s go along with 25% that is about average. So you’ll pay $1,500 per month in rent as well as an additional $375 on the purchase. If your lease lasts 36 months, you’ll have a rent credit inside the volume of $13,500. Median house values in Salt Lake City are $280,000. In the event you paid a 3% option fee of $8,400 and combined by purchasing the rent credit, you’d end up with a advance payment of $21,900 or 7.8%. Not bad.

The certainty concerning rent to own condo

Do you need to have in mind the dirty little secret few buyers in your position realize? Should you decide that you are unable or not wanting to choose the house following the lease agreement, you forfeit Each of the money you have paid. Which includes the Rent Premium and also the option fee. Gone. The entire thing. The owner keeps all the money and you also reach call a moving van and begin around.

You would be surprised on what often times this occurs. The purchaser may run into some issues with your home plus they want out. Money lost. The buyer is probably not capable of be eligible for a a home loan. Money lost. Or, imagine that the seller doesn’t give the mortgage and also the property gets foreclosed on. Yikes! Money lost.

So, prior to deciding to race to snap up the closest rent to obtain or lease option property, make sure you do your required research and have the house inspected. Take effect with a lender so that you can be entitled to a home loan and then for goodness sake, make sure you absolutely love the house.
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