The Rent-to-Own Industry
This is one of the most interesting real estate investing concepts that have recently popped up in the market. It refers to a type of lease agreement where you pay rent until you own a property. When you make your last payment on the property, it then becomes yours for good! This sounds like a great way to get into property ownership without having to spend thousands upfront. However, this might not be the best option if your cash flow and financial situation aren’t stable for at least three months.
How this works: If you’ve been saving up for years and your cash flow is blocked, it can take you a while to get into a property. During that time, you’ll be payingÂ rent or mortgage on your existing place. With Rent-to-Own property, the money that you would have spent goes toward buying the property instead!
The Benefits of Rent-to-Own Housing
In the article, we’ll talk about the top 5 benefits of being a rent-to-own tenant and how this can benefit you. We’ll also provide an in-depth review of what it’s like to live in such a rental unit.
1) Rental Gain In almost every rent-to-own lease, you will be making again on the return of your initial investment. This means that each month you will be able to pay a bill and have some extra dollars to cover it. Over the 10 year period, this can mean up to a 30% increase in net worth!
2) Rental Payments You are not required to make large upfront payments on rent. This means that you’ll be able to spend less each month. Rental payments are generally low which can help someone who is financially delicate.
3) Lawyer Fees You will not need to hire a lawyer to handle your contract because it is usually handled by the management company. This will save you time and money!
4) Flexibility Rent-to-own housing can be very flexible. You do not have to follow a strict schedule in terms of purchase or move-out dates. This can be helpful for those in transition or uncertain about their next move.
5) Efficiency Rent-to-own housing puts a priority on efficiency. The property owners and managers are concerned with getting the most out of the property. This usually entails minor upgrades such as fresh paint or carpet which can help to increase your quality of life.
Residents love the convenience of being able to pay their money monthly and not have to worry about the whole home ownership thing. You also do not have to worry about maintenance or repairs because the landlord is responsible for these.
If you are planning on renting out your property under a rent-to-own agreement, it is important that you choose the right property management company. Make sure that you choose a property management company that has a good reputation in the community. You should ask for references from former tenants and if possible, speak to them. On the other hand, you should also look at the management company’s website to see how they advertise their properties to potential tenants.
The Drawbacks of Rent-to-Own Housing
On the other hand, there are things to keep in mind if you decide to become a rent-to-own tenant.
Actually, these are a few things to consider, but they are not major drawbacks of Rent-to-Own housing. First and foremost, make sure that you check out your contract and terms very carefully. Make sure that it is favorable to you. The company may run into some financial issues having to do with the bank or real estate agent that is selling or renting out the property. This can prolong the process of selling or renting out your home.
To summarize this, you can get the benefits by not having to spend large sums of money to get into property ownership. It is an effective alternative as long as you make sure that it’s what’s right for your financial situation.