The benefits to the buyer of renting to own
The benefits of home ownership are many including tax deductions, security, etc. If you don’t have the means to put a down payment on a home right now, but you want your rent payment to actually go toward an investment, renting to own is an excellent option. One of the biggest benefits is the rate at which you accumulate equity. And you could get more home than you may qualify for at this time.
- Equity growth: The buyer’s rent payments will actually go toward an investment — toward equity in a home. Every month a portion of your rent payment is credited towards your down payment or off of the sales price.
- Option deposit is credited to the price of the home: The buyer/renter pays the seller an option deposit like we mentioned above. This money is vested interest in the home and will be fully credited when you buy the home.
- Minimum expenditures out of pocket: When you buy a home, you need a down payment that is at least 5% of the purchase price of the home as well as closing costs. Here, you’ll only pay a normal rental security deposit typically plus the option deposit. To gte 5% down, you also need to have very good credit. With Rent to Own, you need a minimum of 2% down.
- Flexibility in requirements: Restrictions are up to the seller which means there could be more flexibility with credit, etc. You prove your ability to purchase the home by making rent payments every month.
- Control of the Home: The buyer has full control of the home while paying rent. You’ll get to learn the ins and outs of the home, what should be changed and home improvements, etc. before actually owning it.
- No Taxes, Less Liability: Since the buyer does not yet own the home, they do not have to pay property taxes up front, etc. So the buyer has time to prepare for the cost of the home and learn about the total cost of the home while there before they have to take on full responsibility.
- Minimal Maintenance: Typically large maintenance problems or any maintenance problems that exceed a certain amount of money are delegated to the seller.