| One of the best ways of buying property at a rate | | | | There are many benefits in a rent-to-own situation for |
| that does not get influenced by market trends is a | | | | both the buyer and seller. |
| Rent-to-Own option. | | | | As a buyer, your gain because the changes in market |
| What is Rent-to-Own? | | | | value will not affect the price you pay for the property. |
| Rent-to-Own means is a situation where you agree to | | | | So, if prices were to rise, you don't have to pay more, |
| buy property at future date, based on a specified | | | | just the same amount that was put in the agreement. |
| value in the agreement and in the meanwhile, you live | | | | You make contributions towards down payments |
| in the property on a rental basis. Other terms used to | | | | through rent premiums, option fees and rent credits so |
| refer to this form of a purchase arrangement are | | | | this reduces the full amount that you have to pay at |
| lease-to-own option or a rent-to-purchase option | | | | the time of purchase. This is a real advantage for you |
| What is part of a Rent-to-Own Agreement | | | | when the time of payment comes. |
| The Rent-to-Own is made up of two sections. One | | | | Finally, if at the last moment, you choose to not buy |
| section details the lease terms and the other section | | | | the property, you are free to do so. There is no binding |
| has the purchase option. | | | | option on purchase. Though all the money paid |
| The lease section specifies features such as lease | | | | towards down payments in such situations becomes a |
| amount, the period of lease, date on which amount is | | | | loss for you still, you can do away with a purchase, |
| to paid, and so on. In the purchase section, you can | | | | which you feel is not right in the last minute also. |
| see details mentioned about the opportunity to buy the | | | | Sellers benefit by having someone who will look after |
| property, at a specified time in the future alongside the | | | | their property really well as they will be owners of the |
| price. | | | | property in the future. The seller gets money not just |
| What aspect should you know about a Rent-to-Own | | | | for the home's value but also in the form of rent which |
| agreement? | | | | is an additional source of money, till the actual |
| In a Rent-to-Own agreement, three factors will apply. | | | | purchase happens. In case the buyer decides to not |
| These are rent premium, option fee and rent credits. | | | | buy the property in the end, money taken through |
| Rent premium is an amount that you have to pay | | | | option fee, rent premiums do not have to be refunded. |
| towards the property's down payment. It is an amount | | | | A Look at the Other Side of the Coin |
| that is a little more than the rent. Another thing that | | | | As someone entering into a rent-to-own agreement, |
| goes towards down payment is the option fee. | | | | you should be aware of the other side of this situation. |
| However, you have to note that the option fee is not | | | | As a buyer you will lose your rent premium and option |
| refundable to you, should you decide at the last | | | | fees, should you decide to withdraw from buying in the |
| moment that you don't want the property. A rent credit | | | | end. In case of the seller, should market prices |
| is a portion of the rental payment that is also | | | | suddenly rise high, they would be on the losing end as |
| contributed to the down payment. This is added by the | | | | the price fixed for their property would be significantly |
| seller to the down payment every month. | | | | lower. |
| Benefits of Rent-to-Own | | | | |