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My girlfriend and I are on the hunt for our first home! We are looking in the Auburn area and are in an odd financial situation which would require us to do a rent to own set up for a while. We are currently working with a great company who offers these options - they would work perfect for us, however they have limited 3BR homes available at this time in the area we want to live in.
Does anyone know of any good resources or companies that offer this option?
We'd have the income to afford to buy but our credit isnt the best and while we are working to clean it up - we have a ways to go! We have a 6 year old and want to settle somewhere nice by this summer to allow him a solid school experience with lifetime friends (my parents moved us WAY TOO much when I was a kid - it was awful).
Interested in any ideas, suggestions, referrals...
I can't help with companies that do rent-to-own -- my experience with it was that some sellers are willing to allow a rent-to-own, so that for each month you pay rent, the eventual purchase price is discounted slightly. And you don't have to buy the home -- you just have first option to buy it. I don't like that set up, personally. It seems so limiting, because there are so few owners willing to sell in that way. With some patience, in just a few years you can have so many more options. And the benefit you get when you eventually buy the home you've been renting is generally quite small. Can you find a town you really would love to buy in, and then just rent for a while? Or perhaps contact realtors in the area -- they might have good connections.
I can't help with companies that do rent-to-own -- my experience with it was that some sellers are willing to allow a rent-to-own, so that for each month you pay rent, the eventual purchase price is discounted slightly. And you don't have to buy the home -- you just have first option to buy it. I don't like that set up, personally. It seems so limiting, because there are so few owners willing to sell in that way. With some patience, in just a few years you can have so many more options. And the benefit you get when you eventually buy the home you've been renting is generally quite small. Can you find a town you really would love to buy in, and then just rent for a while? Or perhaps contact realtors in the area -- they might have good connections.
Thank yoU! I appreciate the advice! I actually work with a company right now where you come up with a 5% deposit of the agreed on purchase price and then ALL the rent you pay during your rent to own period comes off the purchase price - including the deposit. It's a great setup and will work well but I am still trying to come up with the deposit on the only ONE they have that suits us and they wont take it off the market until I do. Unfortunately I was married a few years back and never got divorced and that is now in preceedings so until I am divorced I cannot take out a loan or anything else and the $10k is proving harder than I thought to come up with! I'm afraid I may lose this one which is why I was seeking other options. If it doesnt work out - I very well may be waiting a few more years! =-)
Thank you again though...be well
My girlfriend and I are on the hunt for our first home! We are looking in the Auburn area and are in an odd financial situation which would require us to do a rent to own set up for a while. We are currently working with a great company who offers these options - they would work perfect for us, however they have limited 3BR homes available at this time in the area we want to live in.
Does anyone know of any good resources or companies that offer this option?
We'd have the income to afford to buy but our credit isnt the best and while we are working to clean it up - we have a ways to go! We have a 6 year old and want to settle somewhere nice by this summer to allow him a solid school experience with lifetime friends (my parents moved us WAY TOO much when I was a kid - it was awful).
Interested in any ideas, suggestions, referrals...
Thanks,
Jess & Missy
Hi, if you dont mind me asking, what company did you use to do your rent to own option?
I'd be very suspicious of any of these rent to own companies. After all, they are a business set up to make a profit, not to help you out in some altruistic selfless way. And if it sounds too good to be true, like those formerly popular sub prime mortgages, then it is...
These companies exist solely to take advantage of those anxious to purchase a house, but just aren't ready financially to do so. Yes, building equity in oneself is a great thing, but sometimes it's just financially more prudent to be patient and wait until you have the money saved to buy a place the right way.
My advice is to rent the cheapest place possible in an area with a good school for your kids and to cut out all the frivolities in your life. Work a part time job if you can. Pay down any debts and start saving as much money as possible... until you can buy a place with legitimate mortgage and within your means. Sometimes, it's just smarter to rent. And the mistake so many have made and that has helped cause current the real estate crisis and general recession is everyone trying to live beyond their means.
I'd be very suspicious of any of these rent to own companies. After all, they are a business set up to make a profit, not to help you out in some altruistic selfless way. And if it sounds too good to be true, like those formerly popular sub prime mortgages, then it is...
These companies exist solely to take advantage of those anxious to purchase a house, but just aren't ready financially to do so. Yes, building equity in oneself is a great thing, but sometimes it's just financially more prudent to be patient and wait until you have the money saved to buy a place the right way.
My advice is to rent the cheapest place possible in an area with a good school for your kids and to cut out all the frivolities in your life. Work a part time job if you can. Pay down any debts and start saving as much money as possible... until you can buy a place with legitimate mortgage and within your means. Sometimes, it's just smarter to rent. And the mistake so many have made and that has helped cause current the real estate crisis and general recession is everyone trying to live beyond their means.
I think this is the best advice you will ever get. Live well below your means and start saving. When you get to the point where you are able to afford a home, then start looking for some affordable place. Try not to spend every last dollar to get the best possible place you can. Rather go for something that will suite you. Live well within your means and you should be able to afford everything you need.
miu- Why be suspicious of a company that helps people get in to a rent-to-own home just because they're making a profit? I'd be more suspicious of a company that ISN'T trying to make a profit!
Last edited by CaseyB; 10-19-2010 at 03:04 PM..
Reason: link to realtor site
Be careful about the rent-to-own. You should really do a lot more reasearch on it. It will limit you to the very small number of properties available to be sold that way and many of them are being sold for investors (of which the rent-to-own company may just be that investor). You might get lucky and find a reputable investor that treats you right but they are in it to make money for themselves and there are many inexperienced investors trying to pass themselves of as savvy real estate moguls. They are savvy... for themselves.
It is unrealistic that 100% of the rent be applied as down payment. When it comes to financing, the lenders will only conider a portion of the rent to be DP as there is an assumption that you pay a fair market rent to live. As for the IRS, if you somehow were able to apply 100% as DP, they might consider that additional income. You should really consult a professional familiar with rent-to-own that will look out in your best interest, whether a Realtor or Real Estate Attorney and consuld a tax accountant. I know this sounds like overkill but from what you have described, you may not have all the facts about the transaction and the risks.
If you fall behind in your rent, you could end up forfeiting the option deposit and all the rent credit, even if you correct the delinquency.
Please be careful! You will have many more options if you rent for a period until you are ready to buy, then look for a home that meets your needs at that time.
Good luck!
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