How Rent to Own Homes Work

A Rent to Own home in Woodridge, IL

Risks and Benefits to Buyers

For many people, a home will be the biggest purchase they ever make. Both buyers and sellers should carefully weigh their options before agreeing to any binding contract. Let's look at some advantages and disadvantages of a Rent to Own agreement for buyers:

• Buyers can move toward home ownership and exit the rental “Rat Trap” even before they can qualify to buy a home in a traditional sale.
• Buyers can lock in the price of the home a year or more ahead of their actual purchase. If the market goes up, the buyer earns instant equity in the home, sometimes significant amounts of equity.
• Buyers have time to build income and repair their credit history as they rent the house.
• Depending on the agreement, renters can walk away if they find something seriously wrong with the house. Although the renter will lose the option fee and the rent credit they earned toward the purchase price, that amount will be much less than if the renter had bought the house outright and tried to leave it later.
• Buyers still have to pay the upfront option fee. It's usually a percentage of the agreed-upon selling price of the home and is often thousands of dollars. Although this money will go to the down payment should the renter decide to buy the house, it can still be difficult to accumulate that much money before renting.
• The buyer can earn "Rent Credit" toward the purchase price while they're renting the home. This credit can substantially reduce the amount they eventually borrow when they finalize the purchase of the home. 
• At the end of the rental period, the buyer still may not be able to buy the home for the same reasons they couldn't buy at the start of the lease: bad credit, insufficient down payment, not enough income. Usually, a Rent to Own contract can be extended to give the buyer more time to get qualified for a mortgage so that they can complete the purchase of the home, but it is the buyer's responsibility to take steps toward that goal. This is why many Rent to Own agreements include clauses about working with a credit repair specialist or mortgage broker chosen by the seller.
• Minor repairs that were handled by the landlord in a rented apartment often become the responsibility of the new buyer, even during the rental period. Typically the landlord will still be responsible for major repairs -- such as a leaky roof or installing a new furnace -- but the tenant-buyer will often be responsible for taking care of minor repairs. Whether it means climbing on a ladder to unclog the gutters or having to pay for a new washing machine when the original washer breaks, the renter has to take care of it.



Many Rent to Own homes are newly rehabbed

• Buyers can experience “Pride of Ownership.” This is not just another rental for you. You are on your way to owning your own home!

We have Rent to Own homes available now throughout the Chicago area. Call Adam at 630-697-4500 or email AdamRE2014@Gmail.com to find out more. You can see pictures, videos, and more information about the homes we have available for Rent, Rent to Own, or for Sale on our website at www.MyHappyHomeSolutions.com. Subscribe to our list to find out about Rent to Own homes before the general public even knows they’re available!

                                                                                     -- from http://home.howstuffworks.com/real-estate