Rent to own is an ideal option for the people who want to buy a home but may need a little time to build their credit scores or those who may need time to build up enough amount down payments. This is the reason why rent to own properties are on the rise in today’s real estate market. Many people use this opportunity to check out the neighbourhood prior to making a full commitment of purchasing the property outright. Thus it makes perfect sense for the investors who want to avoid the risk of putting their money on wrong properties.

The concept of Rent to Own

The rent to own scheme is usually associated with a lease option home or lease purchase home.  You have an option in the agreement that gives you the right to purchase your rental home within a certain period of time.  In this process the landlord and the tenant agree upon a price. There is usually an initial option amount upon signing the agreement and after that you have to make a monthly additional payment which accrues towards the purchase price of the home.  The whole transaction is carried out with legal rent to own paper work.

Scams & caution

But the process needs to be approached with caution so that both the parties stand to benefit.  In Florida, people have lost their money as well as homes due to the rent to own specialists turning scammers. To eliminate frauds and loss it is advisable to seek an attorney’s help to prepare the rent to own paperwork with all the clauses specified in detail.  By getting everything in writing, you can avoid the usual pitfalls involved in such transactions.

How to avoid scams

1. Do your homework by researching the company or individual with whom you are entering into the rent to own contract.
2. If you actually find a traditional Realtor who specializes in rent-to-own homes, make sure you choose the licensed person or company.
3. Get the future purchase price in writing. It MUST be locked in and it must be in writing in the contract! Do NOT sign a contract with a floating future purchase price, unless you know exactly how the future price will be determined and you agree to the calculation.
4. You must read all the paperwork very carefully before signing. If the person offering the house with rent-to-own terms does not allow you to get the paperwork reviewed, don’t do business with that person. A legitimate rent-to-own home specialist will not have any problem with an attorney or anyone reviewing your paperwork.
5. Patience is very important.  Do not allow anyone to pressure you into signing a paper or handing over money. Scammers often attempt to create urgency telling you that if you fail to buy at the moment you will lose the opportunity.
6. Request a professional or loan officer assist you in forecasting your future payment before signing any rent-to-own paperwork. You must be satisfied that you will be able to afford the home.  
7. Ask as many questions as you want to understand every clause in the agreement till you are clear what they mean.