Due to limited funds, not everybody can afford to buy a house. So, the next best and wisest thing to do is acquire the property gradually. Most people who lack the finances and yet, would want to buy a house would opt to look for a rent to own property. This is the trend nowadays. But, no matter how great of a deal it is, make sure that you know the advantages and disadvantages of a rent to own property.
To avoid being blinded by this kind of deal in owning a property, you better review the pros and cons of finally deciding to go for a rent to own house.
The following are the advantages of rent to own houses:
- You have time to save up to pay for the property.
If you are eyeing on acquiring a rent to own property, it would give you the pleasure of time in order to raise funds that will enable you to buy the house.
- Your rental fee can deduce the actual amount of the property.
You can acquire the rent to own house at a lower price if your rental fee is considered part of the whole amount you have to pay. Make sure that there is a clear agreement between you and the seller which states that the rental fee should be deducted from the whole amount that is required to finally call it your own.
- If you are on a rent to own deal, you can consider it as a “trial period”.
A rent to own property is your chance to test whether the house has defects or anything that will make you change your mind of pushing through with the purchase.
If you are the current renter, you are the priority who can easily close the deal to buy the rent to own property.
The owners of the rent to own property can easily discuss the details about the deal you are going to make at the end of the rental period. In this case, being the current renter makes you the most qualified buyer of the property without having to compete with other buyers.
On the other hand, listed below are the disadvantages of a rent to own property:
- You might end up buying a property and paying for unpaid mortgage.
This is a usual risk for those who are so desperate in grabbing the seemingly good deal of a rent to own house. When you find yourself really determined in owning this type of property, it is most likely that you overlook the nitty-gritty details that original owners are willing to sell off the rent to own house because they do not like to pay for taxes or mortgages anymore. So, instead of just paying for the amount of the property, you might be paying for more because of the unsettled mortgages and not to mention, interest. Therefore, better clear out any contracts before jumping into the decision of buying the rent to own property.
- The seller has the power to nullify your rental payments.
If you happen to run out of money to pay for the rental fee, the owner of the house can cancel all your paid rental fees making you waste money when it should have been counted as a down payment or equity already.
- Anything that needs repair will be shouldered by the buyer.
If you are currently renting and finally agreed to buy the house, any part of the house will be your responsibility to repair. So, even while you are renting, you may still shell out an amount of money to finance for house repair.
- In totality, you might find yourself paying for a higher price.
In wanting to acquire a house, buying the rent to own properties may give you the burden of paying for a higher price. This is so because at the beginning of the contract, you will be required to pay a 1% to 5% upfront fee plus the monthly rental fee and other dues which may be charged to you as a renter.
Buying a rent to own home is really a great decision to make. You should be wise enough to consider all things covered in your contract or agreement. But, most of all, you should be able to make a deal where both you, the renter and the seller gets even and no one ends up getting taken advantage of. After all, money is seriously earned so it must not be just thrown away.
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