In the United States, 48% of renters are worried that they will never be able to buy a home. Many of the reasons why people feel like they cannot buy a home are if they have poor credit, do not have enough money for a downpayment, and more.
In these cases, an alternative housing option is finding a house that they can rent to own.
Do you want to learn more about the benefits of rent-to-own houses? Keep reading this rent-to-own guide to learn how you can get started with this alternative housing option.
Builds Equity
Perhaps the biggest benefit of renting to own a home is that it allows you to build equity for your future home purchase. When you rent a house or an apartment, all the money that you pay each month goes to someone else. It essentially feels like flushing money down the drain.
However, all of the money that you pay will go toward your future ownership. Another benefit of rent-to-own houses is that equity grows faster than traditional mortgages. Because tenants can make home improvements as they pay rent, they may find that their home is worth more money by the time they can buy it.
No Downpayment
Downpayments can be a huge financial stressor for many potential homebuyers. 40% of Americans said that paying a downpayment is the greatest financial barrier to becoming a homeowner.
If you do not have a large amount of money saved, it can be difficult to buy a home the traditional way. Typically, a downpayment is a certain percentage of the overall value of a home. Most people recommend putting down at least 20% of the home’s value for a downpayment, but some mortgages only require as little as 3%.
However, renting to own a home does not require any downpayment. Often, you only have to pay a rental deposit. Then, your rent payments will be combined to create a downpayment when you buy the home in the future.
Make Sure You Like the Area
Another great benefit of rent-to-own homes is that it allows you to make sure you feel comfortable in the area. This way, you can live in the home, learn more about the neighborhoods and schools, and make sure you want to stay in the home before you make a permanent contract or obtain a loan for your home.
This way, you will be more likely to obtain your dream home!
You can also learn more about the condition of the property when you rent to own a house. You can see what repairs need to be made, learn about the issues with the property, and more.
Saves Money on Realtor Fees & Taxes
When you buy a home, you can spend thousands of dollars in realtor fees as well as taxes. However, rent-to-own homes can save you a lot of money! Many times renters do not have to pay for homeowner’s insurance or property taxes when they rent-to-own.
This is because the landlord is still the owner of the property and is in charge of these fees.
If you are already living on the property, it is also more convenient as you do not have to hire a real estate agent or realtor. Instead, you can work out a deal with the seller on your own and save thousands on real estate fees.
Doesn’t Require Good Credit
Something else that prevents many people from buying a home is that they do not have a good credit score. When you are trying to obtain a loan from a mortgage lender, they require a good credit history for you to qualify.
If you have not been able to build up your credit, you will not be able to have the money to buy a home.
However, even if you cannot qualify for a home loan, you can still begin purchasing a home by renting-to-own. They are much easier to qualify for and will give you enough time to build your credit score which may even allow you to get a loan when you are ready to buy your house.
You Can Move In Faster
Next, a rent-to-own home allows you to move in faster than you would with a traditional home purchase. When you are buying a home, it can take months for your offers to get accepted and to finish closing.
If you are anxious to get into your dream home, you can move in within a week or two, or as soon as you finish filling out the documents.
More Control Over Your Home
Finally, renting to own a house is a great benefit for renters because it gives you more control over your home. In traditional renting situations, you are unable to make any changes to your home.
Some contracts are so strict that you are not even allowed to paint, hang pictures, or do anything else to improve the appearance of your home or apartment.
However, in rent-to-own houses, you can make repairs, adjustments, and any other improvements that you want to make to the house. It will make your home feel more personalized and comfortable.
Learn More About the Benefits of Rent-to-Own Homes
When you are looking to buy your first home but do not have the money or the credit to qualify for a mortgage, following these rent-to-own strategies can make it easier for you to find a home.
By learning more about these benefits of rent-to-own homes, you can get a better deal for your house and move in faster! Are you looking for help finding rent-to-own homes? Home Buyer Creators can help!
Contact our team today to learn more about rent-to-own tips and to find listings near you.
