Should You Consider Rent to Own
Rent To Own homes present a perfect solution for home buyers and sellers when it comes to preforeclosures, foreclosures and REO properties along with stringent credit policies. This alternative offers cash-strapped homebuyers a chance to save on the down payment as well as increase their credit standing. On the other end, equally cash-strapped preforeclosure seller will be able to relieve himself or herself with the impending foreclosure with someone else assuming mortgage payments and ultimately taking the property off their hands.
While rent to own homes are no doubt an ideal alternative plan, the theory may not carry out in real life scenarios. If seriously considering this option, what are the key aspects to look for is the first question. Alternatively, is a rent to own arrangement ideal for you?
Ideal Factors that Can Work to Your Advantage
The great aspect of this trend is most of the underwater homeowners are now willing to take lesser upfront payments. This means a buyer or renter is at a lesser loss when deciding to push through with the purchase. In addition, with the flood of preforeclosures and foreclosed properties, one can take a pick from the numerous choices available. In most cases, home sellers who consider rent to own purchase are actually well into the desperation stage.
As with any type of real estate purchase, these arrangements come with its own set of risks. It is possible for the buyer to find out that the homeowner has actually stopped making the mortgage payments while property is under the lease term period. On the other hand, owners/landlords can also potentially end up with a tenant who is remiss in making payments on time and completing the purchase.
Who Should Consider Rent to Own?
Even with risks, one can foresee these arrangements becoming more popular in the upcoming years. It presents one of the best transitional steps to curing the housing market crisis. Despite the set of risks, it is still one of the better options available for both homeowners and homebuyers. If executed flawlessly, it’s the best preforeclosure deals you can find.
However, here are some of the factors that need to take into account:
Rent to own is not recommended for individuals who require time to repair their credit standing to make a purchase.
It is ideal if both parties involved have good track records or those who have something more at stake, such as a long time tenant, a family member or maybe a friend who is very interested in assuming the property.
A lease to purchase agreement should be prepared by an attorney or real estate professional to ensure the protection of the homeowner and potential buyer. Moreover, as we all know when it comes to dealing with contracts, the devil is in the details. This means one needs to take the necessary precautions such as knowing everything about the homeowner. By doing so, requesting for a home inspection and discussing thoroughly the stipulations of the agreement with a fully outlined ‘conditions precedent’.
If one has a potentially ideal rent to own opportunity, go ahead and explore the possibility. If keeping oneself well protected all through the transaction process, it can turn out to be the perfect investment opportunity.
Rent To Own Summary
Rent to own, is a terrific option for those who want to buy a property but are having trouble seeing themselves settling down in one spot. Rent to own gives you the opportunity to secure a property without the commitment of buying it immediately. You just rent for a short period of time. If you do love the property, then it is yours to buy and all there is left to do is to throw a housewarming party.
When purchasing any real estate, the informed buyer needs to study the property and take measures to make the transaction as profitable and safe as possible. To prepare for opportunities in the foreclosure real estate market you should create a team of specialists to help you. Having a professional property inspector, appraiser, and a good title agent and real estate broker can be important elements in determining if a foreclosure property is right for you.
Taking an organized approach to help simplify the process of bidding on foreclosure properties, use the checklist at this location: Click to get the Home Buyers Checklist