RentToOwn-HouseFinder.com
Lease/Rent To Own Houses-Any Info?Thanks!?
Does anyone know any info on how the process works when you rent to own a house, like Leasetoownsc.com? Like, if you are bound to buy the house or can just rent with the option? I would like to rent with the option to buy- any info? Thanks!
Public Comments
- i've been told its a bad idea. but no one can give me any real specific reasons as to why... i mean you get to test drive the house for a year or whatever before you buy it. and if you don't like it or the neighborhood then you can walk away.
- An option gives you the right to buy, AND the right to walk away. There's a time period, for example 5 years, and an agreed upon price. You could also agree to an equity share, perhaps based on applying a certain percentage of your rent payments to a purchase-price reduction. In exchange, you would pay the owner a deposit - held in an attorney's escrow account - that could be forfeited if you do not purchase the home, under certain conditions. I'm sure you'd be fine, however, if you moved out two years into the contract, because the owner neglected to fix a hole in the roof. Lease-purchase options can be a great opportunity, especially in this market, which could either rebound or take a serious dive. At a predetermined price, you would get the option to purchase a home that could go up in value substantially. If it doesn't, you have the right to walk away. Negotiate certain "chores" as your deposit, but be sure to be able to distinguish which chores you are responsible for. Fixing a faucet? Maybe. Repairing a roof? No way! If you pursue it, be sure to consult with an experienced attorney to help you negotiate and draw the contract. Good luck!
- Here is how I work it. The tenant gives me $5,000 and moves in with the lease option. The tenant is responsible to pay rent every month. If they don't, they are evicted and lose their money. If they do pay the rent, $100 of each month's rent is credited to their original $5,000. At any time up to 3 years they may buy the house. After 1 year they would have $5,000 plus $1,200 or $6,200 total. After 3 years they would have $8,600. If they can't buy within three years, they lose their initial $5,000 and the $3,600 credit. They lose it all. If they can get a loan and buy, they have a substantial down payment and 3 years of good credit with me to get a good rate. Either way, I don't lose anything.
