Rent to own is a rental model that allows buyers to rent a house they want to buy as the rental payment clears the price of the house. This concept gives homeowners a chance to live in their own homes as they clear funds for a certain period. Moreover, superior homes give a maximum lease of 3 years. The process starts by identifying the property then you do a payment of not less than 50% before occupying the house. Tenant and vendor sign an agreement that shows the seller is committed to selling the house and the buyer is ready to buy.
Pros
1.Equity. Rent credit helps buyers to save money for purchasing a home. Rent to own is different from traditional equity seeing that the buyer is not yet the owner. It can be compared to investing in the future.
2. Peace of mind. You can get good neighbors since you stay in the place as you pay. In addition to that, you will not worry about the prices of houses shooting over a period of time. This helps you to save enough money for buying a property before the price is surpassed.
3. Remove sorrow. Rent to own gives a buyer a chance to test the property before buying. You should always confirm that the agreement you are signing is legit. This will help you not to invest in a home that has issues.
4. The same price. agreement of the property is fixed and cannot be reversed. The purchase price cannot be increased by the seller during the contract. This is great for homeowners because the market keeps on changing.
Cons
1. Scams. There are people who want to take advantage of homeowners to earn money. You can differentiate scammers and legit people by checking the type of language. Purchasing a property is an option and no obligation. Moreover, you should not share personal information such as accounts and identification cards. Legit sellers offer fee-free contracts as well as a house inspection.
2. Late payments. seller of the property can get rid of the agreement in case of delayed payment. One single payment can ruin the whole agreement. For this reason, you can lose the property to someone else.
3. Lack of financial guaranteeing disadvantage is when you do not qualify to get a loan. Therefore, the credit card should be in a good place when you want to buy a house. This will help you not to lose premium especially the agreement does not have renewal.
4. Damages. When you are renting a house, you will be responsible for any damage. This is great if you want to invest in the future house. You will repair the furniture in case you break. However, you should ensure furniture is in good condition before you move in.
5. Lose funds. Rent credits and premium payment cannot be refunded back. Henceforth, if you back from the deal, you will lose all the funds you invested.
6. Problems. Contracts can be problematic even if the deal is worth it. There are certain drawbacks you might inherit.
7. Expensive. Seller requires monthly payments as well as a higher down payment at the same time. However, the rent agreement is less costly.
