Rent to own real estate option is commonly used by people who want to sell their house quickly. There could be various reasons for quick selling like foreclosures, mortgage repayment problems, divorce proceedings or migrating to a different place. In the current real estate scenario, where the property market is very slack, it is very difficult to find potential buyers. So people have to wait for a long time to get their houses sold. The rent to own system offers a perfect solution to such cases.
Today there are many individuals or companies who offer rent to own real estate option. This is one type of sale wherein you sell your property to an individual or company offering rent to own system and buy the same property in future. Before buying the house, individual or company quotes a buying price for your property. Then the same property is given on rental basis. The terms like how much rent is to be paid and tenure of the period are agreed upon. The tenure period could be either for 1 year or 2 years or 3 years depending on the tenant.
If the price and terms are agreeable, a sale agreement as well as lease agreement is signed between both the parties. The tenant has the option of buying the same property at the end of the lease period and purchase rate or buying rate is fixed during the agreement. It is better to check the terms and conditions before signing the deal. It is quite important for the seller as well as the buyer in deciding the price of the property keeping in mind the fluctuating real estate market conditions as well as the rental period. The sale price gets locked once the conditions are agreed. In the rent to own real estate system, the most important thing is that the interest of the buyer as well as the seller is safe-guarded.
In this option, apart from the normal rent payments, the tenant or the renter has to pay an option fee as well as rent premium which is treated as down payment. The option fee could be in the range of 1% to 3% of the buying price. There is rent premium which is slightly higher than the normal rent amount. The additional payments are treated as savings or initial deposit amount and are very useful to the renter while buying the property in future.
There are many advantages to people going for rent to own real estate system. The home repossession problem can be avoided as well as mortgage repayment problems are easily solved. Foreclosures can be avoided. Renters can overcome their poor credit history. In this system, the sale takes place within a short period of time. You can continue living in the same property without disturbing your normal life. Children’s education is not disturbed. It is a win-win situation for people opting for rent to own real estate.