So that you are tired of renting. You would like to own your house, but you will not have a great deal of deposit. Undoubtedly you’ve heard of “the perfect solution” – rent to obtain. But could it be really as perfect as everyone says – hardly. There are a few secrets about rent to possess properties you need to find out about. They are most overlooked facets of a rent to own deal. So let’s understand the truth about lease to possess homes.

How Rent to possess Works

Making this how it operates. You rent a residence using the substitute for buy. You will have a lease that can typically last between 2-3 years. Owner will even require that you put some kind of upfront down payment or option fee. It’s usually 1 to 7 percent from the decided final cost. In addition to the rent, you will pay what is called a Rent Premium or Rent Credit. This extra amounts put towards final cost of the house.

Let’s see what sort of Salt Lake City, Utah rent to own works out. At the time of January, 2017 the median rent for the 3 bedroom, 2 bath house in Salt Lake City is $1,500. The additional amount that you’re going to pay towards purchase is negotiable. Generally you should expect to pay for 20 to 50% across the market rent. With regard to argument, let’s opt for 25% which can be about average. So you will pay $1,500 per month in rent plus an additional $375 towards the purchase. In case your lease lasts Several years, you’ll possess a rent credit from the volume of $13,500. Median home values in Salt Lake City are $280,000. Should you paid a 3% option fee of $8,400 and combined by purchasing the rent credit, you’ll end up with a advance payment of $21,900 or 7.8%. Beneficial.

The reality regarding cheap rent to own homes

Do you want to know the dirty little secret few buyers inside your position realize? In the event you determine that you might be unable or hesitant to buy the house following the lease agreement, you forfeit Every one of the money you have paid. That features the Rent Premium as well as the option fee. Gone. Everything. The vendor keeps the cash and you also arrive at call a moving van and start all over.

You’d be surprised how more often than not this occurs. The purchaser may run into some difficulties with your home plus they want out. Money lost. The customer will not be capable of be entitled to a home financing. Money lost. Or, imagine that the seller does not spend the money for mortgage and the property gets foreclosed on. Yikes! Money lost.

So, when you race to snap the closest rent to have or lease option property, make sure you do your due diligence and also have the house inspected. Start working using a lender so that you can qualify for home financing as well as goodness sake, make sure you love your home.
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