Let's face it, For many people struggling to find a home to call their own due to historic inventory lows, surging home values, and soaring mortgage rates, may seem impossible right now. The feelings of frustration and discouragement are definitely justified and it seems both buyers and sellers are paralyzed by the situation. However; those that know how to be creative during these uncertain times can still navigate these obstacles and achieve their desired dream if they know where to look. Enter the Rent-To-Own strategy. This can be a good alternative option to the more standard ways of getting into homeownership, but what is rent-to-own and how does it really work? Keep reading on to learn more.
A rent-to-own home sometimes referred to as lease-to-own home, at its core, is a home that you would rent for a specific period of time. At the end of the rental period, you would buy the home when your lease term expires. As you make rent payments during the lease period, a portion of the rent you pay to the homeowner goes towards the down payment on the home. You have the option to use the money that’s accrued to buy the home at the end of your lease period. The rental lease terms may be for a year or a few years depending on the agreed upon terms. You may be thinking this sounds great, how do I get started? Or, this sounds too good to be true, why isn't everyone doing this? Well, Let's dive into some pros and cons of the rent-to-own world.