Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I was just wondering if anyone has had experience with the rent to own setup. My credit is only average and im not sure i would qualify at this momnet for a real estate loan. At the same time, Im sort of sick of paying 2000 a month for rent, and throwing money out the window. Has anyone done this? In your opinion, is Rent to own worth it? Thanks in advance.
Live in Chicago Bucktown witha pretty dcent annual income.
I would work on getting your financial house in perfect order, first and then buy something you can afford. Quit buying stuff you don't need or have to move. Don't open any more credit lines. Never use more than half of your open credit lines.
I would also add, why not talk to a lender and see where you stand?
It may be better, or worse, than you think but the truth will set you free.
You will either know that you can buy, or can plan what you need to do to actually buy.
Rent to own or lease/purchase or lease/option won't work if you don't have your financial house in order and don't have a plan to get it in order in a time frame.
Many of these transactions are mere schemes to separate people from deposit money and higher-than-market rents, and many operators do not believe that the transaction will ever actually close.
?..................
Many of these transactions are mere schemes to separate people from deposit money and higher-than-market rents, and many operators do not believe that the transaction will ever actually close.
This is the experience of most people who do this.
I'm in the middle of putting one of these together for a Buyer that hasn't been in his current line of work for the required 2 years. You never know where you are until you talk to a lender. Rent to Owns are rarely the best route but they can be helpful for those folks that are incapable of stashing away down payment money themselves.
I agree with the previous posts, check with a lender and see if your credit is where it should be to buy a home. There are mortgage products that do not require a down payment.
I'm in the middle of putting one of these together for a Buyer that hasn't been in his current line of work for the required 2 years.
Could you describe this more fully?
(I have my doubts but perhaps you're doing the one in a thousand R2O deals that is legitimate)
A few questions come to mind:
Do the buyers have a locked in price for the property based on todays valuation which uses an independent appraisal? Are property values out there still trending downward as they are in most places?
Is that "locked in price" in the form of an "option contract"?
A recognized instrument with all the rights and responsibilities and most importantly the time limit for exercising the purchase option and the default criteria clearly spelled out? (for the benefit of the 99:1 chance that the buyer won't be able to follow through) Does it have any language describing an ability to extend the contract if X months isn't quite enough? Does that change anything else in the deal or have a fee associated?
Is there ANY up front money from the "Buyer" involved?
Is there a separate and standard rental lease agreement to allow these people to occupy the property with clearly stated LL:Tenant responsibilities for upkeep and the rent rate and renewal terms and all the rest? (just in case they aren't able to exercise the option)
Is the rent fair the market rate for the condition and location and size of the property?
Between these two legal commitments (let's call one "the rock" and the other "the hard place" -OK?) exactly how is the agreement phrased w/r/t the cash the tenant will need to eventually close this deal?
Is **any** of the cash from the sellers side? Will the seller hold any paper on the deal?
Does the seller actually own the property (free and clear)?
Quote:
Rent to Owns are rarely the best route but they can be helpful
for those folks that are incapable of stashing away down payment money themselves.
The tenant is supposed to accumulate the cash that might eventually be used for the purchase and closing at the same time they are supposed to clean up their credit problems... based on their current earnings and other continuing expenses... how many months of tightened belt living will it take to be able to follow through here?
I was just wondering if anyone has had experience with the rent to own setup. My credit is only average and im not sure i would qualify at this momnet for a real estate loan. At the same time, Im sort of sick of paying 2000 a month for rent, and throwing money out the window. Has anyone done this? In your opinion, is Rent to own worth it? Thanks in advance.
Live in Chicago Bucktown witha pretty dcent annual income.
No. Rent to owns rarely close and are almost always written which when successful end up with the buyer paying above market rent for a couple years and then overpaying for the house. In addition you sometimes end up paying property taxes, a dispropianate amount of repairs(that you wouldn't pay if you were renting).
In addition to this, there is a big risk that the seller may go into foreclosure leaving you without option money. Also many times this is scam
No. Rent to owns rarely close and are almost always written which when successful end up with the buyer paying above market rent for a couple years and then overpaying for the house. In addition you sometimes end up paying property taxes, a dispropianate amount of repairs(that you wouldn't pay if you were renting).
In addition to this, there is a big risk that the seller may go into foreclosure leaving you without option money. Also many times this is scam
I have a tendency to agree with JDM but I believe there are two heads on this snake.
One using it as a crutch in that they are economically in trouble and will never be able to make it work no matter their good intentions (the buyer).
The other unable to sell when and for how much they want, thus willing to agree to whatever if in their favor (the seller).
In many cases neither is bad, cheating, etc. (or both might be). Either way, there is a snake in the grass in these deals.
Either rent or own...never muddle the two together.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
