Most of us are very familiar with the term �rent to own�. Places such as Prime
Time and Rent A Center have built an empire with rent to own merchandise,
although the buyer normally ends up paying double what the merchandise is
actually worth. While this may be great for those who have bad credit, most of
us prefer to avoid going this route. Homes are no exception, especially if you
are buying a home on a rent to own basis.
Even though rent to own may be good in the interim, it proves to be an expensive
way for someone to buy something they intend to keep. Rent to own merchandise
for example, may sound quite compelling at a few dollars a week. The agreement
is normally for around 15 - 20 months, which is where the company makes their
money. Although you may be paying just a few dollars a week, the total amount
quickly adds up to nearly twice the cost of the item.
Along with paying rent, you�ll also have to pay appropriate sales tax as well.
Like merchandise, rent to own real estate has it�s shortcomings. Even though it
can be great for those with not so great credit, you�ll normally end up paying
back a lot more than you would with a mortgage. You�ll still have to pay back
your lender with a mortgage, although that amount won�t be nearly as high as it
would if you decided to get a house on a rent to own basis.
In most cases, rent to own houses are put up on the market by the owner. This
way, you�ll deal directly with the owner. It will start out as a traditional
lease, then proceed to a rent to own basis if you decide you want to keep the
home. You and the owner will then work out an arrangement, which will normally
be quite a few years. Some owners are very flexible and will work with you just
to get the price they want for their home, while others will charge you quite a
bit more, in order to make a hefty profit.
If you have bad credit and can�t get approved for a mortgage, then rent to own
would be your alternative. Although some don�t like to do it due to the price,
for many it�s a better alternative than an apartment. With rent to own houses
you are paying money towards the home, instead of just paying rent. In some
cases this is fine, although you should make sure to double check with the owner
before you agree or commit to anything. This way, you�ll know how much you�ll be
paying for the home - and for how long.
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