Which means you are sick and tired of renting. You wish to own your own property, but you do not have a advance payment. No doubt you’ve heard of “the perfect solution” – rent to have. But could it be really as perfect as everyone says – hardly. There are many secrets about rent to own properties you will want to be familiar with. They may be most overlooked areas of a rent to own deal. So let us understand the truth about lease to own homes.
How Rent to obtain Works
Thus, making this the way it operates. You’re renting a house with the option to buy. You’ll have a lease that may typically last between 2-3 years. Owner may also require that you put some type of upfront deposit or option fee. It’s usually 1 to 7 % with the decided upon final cost. In addition to the rent, payable what is called a Rent Premium or Rent Credit. This extra amounts put for the purchase price of your home.
Let’s wait and watch the way a Salt Lake City, Utah rent to possess is acceptable out. As of January, 2017 the median rent for the 3 bedroom, 2 bath house in Salt Lake City is $1,500. Now the additional amount you will pay on the purchase is negotiable. Generally you should expect to cover 20 to 50% higher than the market rent. For the sake of argument, let’s opt for 25% which is about average. So you’ll pay $1,500 a month in rent with an additional $375 for the purchase. If the lease lasts 36 months, you’d probably have a rent credit in the amount of $13,500. Median home 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 would end up with a down payment of $21,900 or 7.8%. Beneficial.
The reality regarding rent vs buy home
Do you need to understand the dirty little secret few buyers inside your position realize? Should you choose that you might be unable or hesitant to choose the house following the lease agreement, you forfeit Each of the money you have paid. That features the Rent Premium and also the option fee. Gone. The whole thing. Owner keeps the money and you arrive at call a moving van and commence around.
Selecting surprised on how often times this occurs. The purchaser might run into some difficulty with your house and so they want out. Money lost. The purchaser may not be capable of be eligible for a a home loan. Money lost. Or, think the seller fails to pay the mortgage along with the property gets foreclosed on. Yikes! Money lost.
So, before you race to snap the closest rent to obtain or lease option property, ensure you do your research and also have the house inspected. Begin their work which has a lender as a way to be entitled to home financing and then for goodness sake, be sure you love your home.
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