And that means you are tired of renting. You need to own your house, but you do donrrrt you have a great deal of downpayment. Undoubtedly you have heard of “the perfect solution” – rent to own. But could it be really as perfect as everyone says – hardly. There are several secrets about rent to obtain properties that you need to find out about. They may be most overlooked aspects of a rent to own deal. So let’s get the truth about lease to have homes.

How Rent to Own Works

Making this the way it operates. You are renting a residence with the choice to buy. You’ll have a lease that can typically last between 2-3 years. The vendor will even require that you put some form of upfront advance payment or option fee. This is usually 1 to 7 percent from the decided upon price. In addition to the rent, you will be paying what is called a Rent Premium or Rent Credit. This extra amounts put on the cost of the home.

Let’s examine what sort of Salt Lake City, Utah rent to have works out. As of January, 2017 the median rent for a 3 bedroom, 2 bath house in Salt Lake City is $1,500. Currently the additional amount that you’ll pay on the purchase is negotiable. Generally you are very likely to pay 20 to 50% above the market rent. With regard to argument, let’s go along with 25% which can be about average. So you will pay $1,500 monthly in rent as well as an additional $375 for the purchase. In case your lease lasts Several years, you would use a rent credit from the volume of $13,500. Median house values in Salt Lake City are $280,000. In case you paid a 3% option fee of $8,400 and combined by using the rent credit, you’d probably get a down payment of $21,900 or 7.8%. Beneficial.

The Truth about rent to own house

Do you need to be aware of dirty little secret few buyers within your position realize? In the event you think that you are unable or often unwilling to buy the house after the lease agreement, you forfeit ALL of the money that. Which includes the Rent Premium as well as the option fee. Gone. All of it. The owner keeps the money and you also get to call a moving van and begin throughout.

Choosing surprised on what many times this happens. The client might run into some difficulties with the house plus they want out. Money lost. The customer may not be capable to be eligible for home financing. Money lost. Or, imagine that the seller ceases to give the mortgage and the property gets foreclosed on. Yikes! Money lost.

So, when you race to snap up the closest rent to own or lease option property, be sure to do your due diligence and also have the house inspected. Start working with a lender so that you can qualify for a home loan and for goodness sake, ensure you love the house.
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