Oops! Sorry!!


This site doesn't support Internet Explorer. Please use a modern browser like Chrome, Firefox or Edge.

Pros and Cons of a Rent-to-Own Home

  • Deciding to purchase or rent to own is an important one. Instead of committing to a full purchase, consider renting first and evaluating all available options. Renting can be exciting but also requires consideration as these contracts are binding, so if it does not benefit your future endeavors, it could lead to discontentment. Before signing up for this leasing agreement, contemplate its advantages and disadvantages carefully to decide what works best for you long term!

  • Pros:

    • With a rent-to-own, buyers who have had credit issues can get back on track while enjoying all of the benefits of owning a home. This is a fantastic opportunity for those looking to restore their financial standing and create stability through homeownership.


    • When you encounter significant issues with the house, you can terminate your contract - something that must be done slowly when purchasing a home conventionally.


    • During your rental period, you can live in the home stress-free as all repairs, upgrades, and regular maintenance are taken care of by the owner. This gives you time to save up funds to purchase the house eventually!


    • By signing a rent-to-own agreement, you are securing the purchase price for your future dream home. With increased market values, your dwelling will be cost-effective compared to other properties nearby!


    • Rent-to-own grants you the opportunity to instantly move into your dream home and begin establishing a credit history. You also get to live in it as if it were indeed yours!


    Cons:

    • When purchasing a home, buyers are typically expected to make an initial down payment, also known as a deposit or option fee. This is generally calculated as 3% of the sale price and rolls into the final purchase cost – an undeniably significant sum!


    • If you choose not to purchase the home, your option fee (or deposit) and any rent credit money towards the house will be forfeited.


    • It is imperative to thoroughly scrutinize contracts before signing. Some rental agreements even stipulate that late rent payments will not be added to the credit score needed when purchasing a home.


    • When purchasing a home, you must be diligent when selecting a trustworthy seller. Otherwise, if the mortgage remains unpaid and foreclosure ensues, the unfortunate result could be eviction for the buyer.