So that you are sick and tired of renting. You want to own your own house, but you will not need much of a advance payment. Without a doubt you’ve probably heard of “the perfect solution” – rent to have. But could it be really as perfect as everyone says – hardly. There are a few secrets about rent to possess properties you will want to find out about. These are most overlooked aspects of a rent to possess deal. So let us know the truth about lease to possess homes.

Thus, making this the way it operates. You’re renting a house using the option to buy. You will find a lease that can typically last between 2 to 3 years. The vendor will also require that you put some kind of upfront advance payment or option fee. This is usually 1 to 7 % of the decided cost. As well as the rent, you will pay what is known a Rent Premium or Rent Credit. This extra amounts put for the final cost of the house.

Let’s examine how a Salt Lake City, Utah rent to own works out. At the time of January, 2017 the median rent for the 3 bedroom, 2 bath house in Salt Lake City is $1,500. Currently the additional amount that you’re going to pay towards the purchase is negotiable. Generally you should expect to spend 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 30 days in rent with an additional $375 for the purchase. Should your lease lasts 36 months, you would possess a rent credit from the quantity of $13,500. Median house values in Salt Lake City are $280,000. Should you paid a 3% option fee of $8,400 and combined by investing in the rent credit, you’d probably obtain a downpayment of $21,900 or 7.8%. Pretty good.

The reality regarding houses rent to own

Do you wish to be aware of dirty little secret few buyers inside your position realize? If you choose that you’re unable or often unwilling to choose the house after the lease agreement, you forfeit Every one of the money you have paid. That includes the Rent Premium as well as the option fee. Gone. Everything. Owner keeps all the money and you also reach call a moving van and initiate across.

Choosing surprised how many times this occurs. The customer might run into some problems with the house and they also want out. Money lost. The buyer will not be in a position to be eligible for a home financing. Money lost. Or, think the seller ceases to pay the mortgage along with the property gets foreclosed on. Yikes! Money lost.

So, prior to deciding to race to snap in the closest rent to obtain or lease option property, be sure you do your due diligence and possess the house inspected. Begin their work with a lender so that you can qualify for a home financing as well as for goodness sake, be sure you really enjoy the house.
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