So that you are fed up with renting. You want to own your house, but you will not need a down payment. Without doubt you’ve probably heard of “the perfect solution” – rent to obtain. But is it really as perfect as everyone says – hardly. There are a few secrets about rent to have properties you’ll want to be familiar with. These are most overlooked aspects of a rent to have deal. So allow us to find out the truth about lease to own homes.

How Rent to obtain Works

Making this the ins and outs. You’re renting a house with all the replacement for buy. You will find a lease that may typically last between 2-3 years. Owner will likely require that you put some form of upfront down payment or option fee. This is usually 1 to 7 % from the decided upon final cost. As well as the rent, payable what is called a Rent Premium or Rent Credit. This extra amounts put for the purchase price of the property.

Let’s examine the way a Salt Lake City, Utah rent to possess would work out. At the time of January, 2017 the median rent for the 3 bedroom, 2 bath house in Salt Lake City is $1,500. Now the additional amount that you will pay towards the purchase is negotiable. Generally you are very likely to cover 20 to 50% higher than the market rent. In the interest of argument, let’s opt for 25% that’s about average. So you will pay $1,500 30 days in rent as well as an additional $375 towards the purchase. If your lease lasts 3 years, you would have a very rent credit from the level of $13,500. Median home values in Salt Lake City are $280,000. In case you paid a 3% option fee of $8,400 and combined that with the rent credit, you’d get a downpayment of $21,900 or 7.8%. Not bad.

The real truth about rent to own condo

Do you want to understand the dirty little secret few buyers in your position realize? In case you determine that you are unable or not wanting to find the house after the lease agreement, you forfeit ALL of the money that. Which includes the Rent Premium and the option fee. Gone. Everything. The owner keeps the money and also you reach call a moving van and initiate all over.

You’d be surprised on what more often than not this occurs. The purchaser might run into some difficulty with your house and they also want out. Money lost. The client will not be in a position to be eligible for a a mortgage. Money lost. Or, think the seller doesn’t spend the money for mortgage and also the property gets foreclosed on. Yikes! Money lost.

So, when you race to snap up the closest rent to have or lease option property, ensure you do your due diligence and possess the house inspected. Start working with a lender to be able to be eligible for a mortgage and then for goodness sake, be sure you love the house.
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