And that means you are sick and tired of renting. You would like to own your own home, but you will donrrrt you have a good deal of advance payment. Without a doubt you’ve heard of “the perfect solution” – rent to own. But would it be really as perfect as everyone says – hardly. There are a few secrets about rent to obtain properties you will want to learn about. These are most overlooked elements of a rent to own deal. So allow us to get the truth about lease to have homes.

How Rent to Own Works

Making this how it operates. You’re renting a home together with the substitute for buy. You will have lease that may typically last between 2-3 years. The seller will even expect you to put some kind of upfront deposit or option fee. This is usually 1 to 7 % with the decided upon final cost. As well as the rent, you will be paying what is called a Rent Premium or Rent Credit. This extra amounts put towards the price of the home.

Let’s examine what sort of Salt Lake City, Utah rent to possess is correct out. As of January, 2017 the median rent to get a 3 bedroom, 2 bath house in Salt Lake City is $1,500. The additional amount you will pay on the purchase is negotiable. Generally you should expect to pay 20 to 50% above the market rent. With regard to argument, let’s choose 25% which is about average. So you will pay $1,500 per month in rent and an additional $375 towards the purchase. Should your lease lasts Three years, you’ll use a rent credit inside the amount of $13,500. Median home in Salt Lake City are $280,000. In the event you paid a 3% option fee of $8,400 and combined by using the rent credit, you’d probably obtain a down payment of $21,900 or 7.8%. Pretty good.

The real truth about rent vs buy home

Do you want to be aware of dirty little secret few buyers in your position realize? If you think that you might be unable or not wanting to buy the house at the end of the lease agreement, you forfeit Every one of the money you have paid. That also includes the Rent Premium and also the option fee. Gone. The whole thing. The vendor keeps the money and also you arrive at call a moving van and start across.

You’d be surprised on what more often than not such a thing happens. The buyer might run into some issues with your house plus they want out. Money lost. The purchaser will not be in a position to be entitled to a home financing. Money lost. Or, think the seller doesn’t pay the mortgage and also the property gets foreclosed on. Yikes! Money lost.

So, prior to deciding to race to snap inside the closest rent to own or lease option property, be sure you do your due diligence and have the house inspected. Take effect which has a lender so that you can qualify for a home financing as well as goodness sake, ensure you love your house.
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