4 Benefits of The Rent-To-Own Property Method

This article originally appeared on asktohow.com

Rent-to-own agreements are becoming increasingly popular as an alternative to renting or buying a house or apartment outright. While the trend doesn’t appear to be slowing down, you should be aware of the pros and cons of this approach before deciding whether it makes sense for your situation or not. Here are four benefits of the rent-to-own property method that you may not have considered.

1. Rent Money Becomes an Investment

One of the most appealing benefits of renting to own is that you can turn your rent into an investment. When you invest in a property with the intention to buy it, you are putting money towards something that will eventually be yours. You may not see this money again if you bought a property and had to sell it, but with renting-to-own, your monthly payments are going towards equity in your new home.

Renters who want to become homeowners through a rent-to-own property often have trouble coming up with 20% down for a traditional home loan. When these renters purchase their home through rent-to-own, they can make small monthly payments over time, and when they have built enough equity in their home, they can qualify for a traditional mortgage

2. Purchase Can Be Made Regardless of Credit Score

You don’t have to have a good credit score to purchase. You can make a rent-to-own purchase regardless of your current credit score. The rent to own property method was designed with people in mind who might need a little more time to save up for their down payment, and it’s also ideal for people who are having trouble obtaining financing from traditional mortgage lenders. 

 How does it work? The rent-to-own process has three main steps: prequalification, contract negotiation, and close. You provide basic information about yourself during prequalification, such as your income, employment history, previous financial obligations, and credit score.

3. Move in Quicker

If you want to purchase a new home but don’t have enough for a down payment, rent-to-own could be your answer. This method does not require any money and can allow you to move into your new home sooner rather than later. Do your research before deciding on this option, though, as there are some drawbacks. Also, make sure that the property is in good shape. Repairs will need to be made before moving in, and if repairs aren’t completed or done properly, it could lead to bigger problems down the road. 

4. Full Control of the Home

The rent-to-own property method gives you full control of your home. You can make all decisions regarding repairs, upgrades, and improvements without interference from a landlord. Plus, there are no restrictions on what you do with your home while you’re renting it. You have full reign to make any changes you want, whenever you want. And if you ever get tired of your new place or decide you want to move elsewhere? No problem! You return the house keys to the landlord and find yourself a new home. It’s as simple as that.

To Conclude

Many people are interested in owning a house but can’t afford to buy one. Rent-to-own is an option for people who want to own their home but cannot afford it outright. This method may be perfect if you have a steady income, credit rating, and deposit. These three things play a major role when purchasing your first home. 

Many people have lost jobs or had to change careers, so they need an alternative solution like rent to own that will get them into the house they desire and give them time to improve their financial status before buying it outright. It also helps with credit because most landlords will report any payments made on time to your credit score.