While rent-to-own homes were less common just a decade ago, this modern method is gaining in popularity for savvy homeowners. Why? Rent-to-own homes offer unique financial flexibility that is perfect for many buyers. However, like any other investment, there are plenty of pros and cons to consider before making the big move. Learn all the key issues around rent-to-own homes, and then get ready to find your perfect house!
What is a Rent-to-Own Home?
Rent-to-own homes strike a balance between the traditional rental and classic financed home. Like a rental, you pay a monthly rent to the homeowner. However, part of this monthly rent goes toward ownership. This is a win-win situation for the homeowner and renter alike. The homeowner will generate additional income, and you will work toward ownership while enjoying your new abode.
What are the Advantages?
No matter how many open houses and ads you go through, buying a home is a bit of a gamble. You never quite know what will wait on the other side of the door after you sign the dotted line. But, rent-to-own homes are different. You get to actually live in the home and experience the neighborhood.
Plus, there are financial benefits as well. You can secure the sales price and terms from the beginning. That means you'll get the exact price that you negotiate, whether the housing market rises or falls in the next decade. This can be a particularly good option for potential buyers with less than stellar credit. If that sounds like you, consider checking out CashMax's personal loan services for your home-owning needs.
What are the Disadvantages?
Rent-to-own homes may carry plenty of advantages, but there are some downsides too. If you decide to purchase the home, you'll get a refund at the end of your contract. However, if you have second thoughts, you probably won't get that money back. So, be sure to really evaluate the house before your move-in date. Don't be afraid to bring in experts, like home inspectors and appraisers! Even if you do decide to purchase the home, keep in mind that not all of your rent money has gone toward the home's price. That's up to the lender, so double check the terms of your financing plan. Keep these tips in mind and you'll enjoy your beautiful new home for many years to come.