Do you want to purchase a rent-to-own or lease-to-own property? I’ll go over a few key points you need to understand today.
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If you’re thinking about buying a rent-to-own or lease-to-own property, there are a couple of things you should know.
First, these are two transactions that are tied together. The first is the rental (lease) and the second is the purchase. The reason these two transactions are tied together is if you end up leaving the house and stop paying rent on it, are you still going to buy the property? Probably not.
Conversely, if you don’t want to buy the home, are you going to be able to terminate the lease? Those two things are very important.
If you are a buyer, you need to reach out to a lender who can walk you through what you need to do as far as the rent-to-own process goes. Buyers often want a portion of the monthly rent to apply to the down payment or purchase price, but the lender needs to do it in a specific manner, so be cautious.
How are you going to handle things if the market shifts?
As the buyer or the seller, you also need to consider how you are going to handle things when the market shifts. If the market goes up and the value goes up on the property, is the sales price going to go up? You are writing today for a future sale in the distance. Hopefully you have a reasonable time frame; anything more than 12 months can be difficult for a residential property.
If you are looking at land, then there are other ways to address the lease to own process.
When it comes to buying rent-to-own, there are so many little things that make a difference in this transaction. I am here to guide you through these nuances and make this transaction simpler. Give me a call or send me an email if you have any questions. I would be happy to help you!