The Truth about Rent to Own (Real Estate)

A lot of things have been heard, talked and asked about the words “rent to own.” For many, this seems a very good deal, as anyone can have the chance to eventually own the place he is renting. This business has made numerous companies’ fortunes and include such places as Prime Time and Rent A Center. But if truth were to be told, very few would go this route, except for those who have bad credit difficulties.

Most people are usually attracted to this scheme because some can be paid off by only a few dollars a week. Payments usually last about 15-20 months. However, if you regularly keep tab of the list of all your payments, you will eventually realize that you are paying double the price, or more than what you would give for a mortgage. This is a steep price to pay, especially for those who have good credit standing.

In addition, part of the terms and conditions in a rent to own scheme is sales tax, which you will have to pay on top of the mortgage fee. Again, even though this can be attractive to those without good credit, better and cheaper deals can be made with direct purchase through mortgage.

There are also instances when rent to own houses start out as purely a lease agreement with the owner, who decides in time to sell it to you. Luckily, you will find an owner who is flexible and work out things with you to get the price he might want for his house. But beware of those who will charge you more in order to make a handsome profit. This is usually done by extending the duration of paying period.

Indeed, rent to own may not be the best way to buy a home, but for those who have fewer options, this is a better alternative than paying rent for an apartment. With rent to own houses, you are not just paying rent but paying to eventually own a home.

The best thing to do in these circumstances would be to make sure of the terms and conditions of the sale with the owner, how much you will be paying and for how long. In this way, you and the owner will both end up satisfied with the deal.