Helpful Articles, Tenants

All About Rent to Own Homes

A Rent to Own program, also known as a Lease Purchase program, is a great way to buy a home through non traditional ways.  Why would you buy a home under a Rent to Own program? For starters, if you’re unable to purchase a home by traditional means because your credit is not in the best shape, then a lease purchase or renting to own may be your next option.  The current real estate market offers some great deals and now is the time look for rent to own homes and to negotiate  rent to own homes that will benefit you. But you don’t want to go into this blind.  It’s good to know the positives and negatives of buying a home through a lease purchase or rent to own program.  Here is five positives and negatives about these popular rent to own plans:

The Benefits

1. You’ll only have to move once.  Unlike living in an apartment and looking for a home,  rent to own home purchases does not involve giving notice and coordinating a purchase closing with a rental move-out.  You get to buy and stay in the home with a rent to own.
2. Learn everything about the home before you buy.  There are things you will never know about a house until you live in it.  Not even an inspection can tell you how much noise you will hear from an adjacent room, whether the garage door will wake you up at night because your master bedroom is directly over it.  If you’re a 1st time home buyer, you just don’t know about these small details.  How noisy is the HVAC unit going to be? Is the closet really as large as you thought.  When you live in the home you’ll experience all the negatives and positives of the home;
3. Build up down payment equity.  With rent to own homes in Atlanta, you can negotiate that specific part of the rent that will be credited or applied to the purchase price or down payment, which will allow you to have some equity when you’re ready to close.
4. Valuable time to repair your credit.  If good credit is blocking you from buying a home, a rent to own program can give you time to Clean Up Your Credit Report so that you can purchase; You can pay off charged off items, dispute erroneous credit issues, and get your score and credit where you need it to be to purchase.

The Negatives:

1. There are no refunds.  If you don’t buy, you lose your equity, your rent to own deposit, etc.  You stand to lose the extra money you pay on your rent each month that was supposed to go towards your down payment.  So be prepared.  Maybe you’ll want to sign a rent to own agreement on your lease renewal.  At that point, you’ll be sure you want to purchase the home.
2. Make sure the owner is current on the mortgage. Seems obvious, but there are a lot of homeowners that are renting because they can’t sell their home, or may not be able to afford the mortgage payments any more.  Make sure your Landlord is current on their mortgage payments.  It is hard, but not impossible to get back any deposit funds if you are paying the rent and the owner defaults and forecloses on their loan.  Include a provision in the lease that the owner must show proof of a current mortgage each month.  Have a 3rd party like a real estate brokerage or attorney hold the deposit until the deed is done.

Hopefully, these tips will help you decide whether you want to buy a home under a rent to own plan in Atlanta.  There are many rent to own listings out there, because many homeowners are renting by necessity, the majority of house rentals can be negotiated to a rent to own home,  you can look for rent to own homes in Atlanta by starting here, or for rent to own homes in Gwinnett, click here.  If you’d like to look at all rent  to own listings, follow this link.

Releated Articles

How To Turn Renting Into Owning

What Are You Doing To Improve Your Credit?

...................................................................................................................................................

Andrea Davis is a real estate broker with 15 years experience working in the Atlanta real estate market, specializing in residential rentals and property management, residential sales and short sales.  Andrea is passionate about educating buyers, sellers and renters throughout their home acquisition process and maintains blogs at Georgia Homes For Rent, $100 Down Foreclosure, Bank Owned Foreclosure Homes and her company site CHRAtlanta.  Andrea firmly believes in the power of education and lives by the motto "knowledge is power".

Andrea's goal with this blog is to help Landlords and Tenants alike navigate through the rental home process to get the best from your rental home.