So you are sick and tired of renting. You need to own your own home, but you will not have much of a down payment. Without doubt you’ve probably heard of “the perfect solution” – rent to own. But would it be really as perfect as everyone says – hardly. There are some secrets about rent to have properties that you need to find out about. They are most overlooked elements of a rent to obtain deal. So let us know the truth about lease to obtain homes.

Making this how it works. You rent a property with all the choice to buy. You will have lease that can typically last between 2-3 years. The owner will even expect you to put some type of upfront deposit or option fee. Rise 1 to 7 percent in the decided upon price. As well as the rent, payable what is known a Rent Premium or Rent Credit. This extra amounts put towards the price of the property.

Let’s examine how a Salt Lake City, Utah rent to have is acceptable out. By 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 towards purchase is negotiable. Generally you should expect to pay for 20 to 50% above the market rent. For the sake of argument, let’s opt for 25% that’s about average. So you’ll pay $1,500 30 days in rent as well as an additional $375 towards the purchase. If the lease lasts 3 years, you’d probably possess a rent credit in the level of $13,500. Median home in Salt Lake City are $280,000. Should you paid a 3% option fee of $8,400 and combined by purchasing the rent credit, you would obtain a downpayment of $21,900 or 7.8%. So good.

The certainty concerning rent to own listings

Do you want to be aware of dirty little secret few buyers inside your position realize? In the event you decide that you’re unable or often unwilling to find the house after the lease agreement, you forfeit All the money that. Which includes the Rent Premium along with the option fee. Gone. The entire thing. The seller keeps the cash and also you be able to call a moving van and begin all over.

You’d be surprised about how more often than not this occurs. The customer may run into some issues with your house and so they want out. Money lost. The buyer is probably not capable to be eligible for a a mortgage. Money lost. Or, imagine that the seller doesn’t pay for the mortgage along with the property gets foreclosed on. Yikes! Money lost.

So, before you decide to race to snap inside the closest rent to possess or lease option property, make sure you do your due diligence and enjoy the house inspected. Begin their work using a lender to be able to be eligible for a home financing and for goodness sake, be sure to love the house.
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