Renting to own is a unique and flexible way of acquiring property. It is particularly beneficial to people who want to own a home, but do not have enough money for a down payment or financing. The renting to own option allows tenants to rent a property with the option to buy it after an agreed period. In this article, we highlight the reasons why you should consider renting to own.
Firstly, renting to own provides an opportunity to build equity. Equity is the part of the property that a tenant owns. During the rental period, the tenant has the option to pay extra amount on top of the agreed rent. This amount goes towards building equity, which tends to add up over time. When the tenant is ready to own the property, they can use their equity to finance the down payment or the purchase of the home. Building equity through renting to own enables tenants who do not have enough savings to buy a home the traditional way the ability to do so.
Secondly, renting to own provides flexibility. In renting to own, the tenant has the option to buy the property after an agreed period. This period is usually determined by the tenant’s needs and preferences. It can range from one to five years or even longer. A longer rental period provides greater flexibility, as it allows the tenant to make better-informed choices about purchasing the property. It also allows the tenant to save enough money towards the down payment while enjoying the perks of the renting period.
Thirdly, renting to own provides a chance to test the property before purchasing it. When a tenant rents a property, they get to experience living in the house before deciding to buy it. They get to understand the layout, the neighborhood, and its pricing. This understanding enables them to make informed decisions about buying the property, as they are aware of any potential issues that need to be addressed before making the purchase.
Fourthly, renting to own provides the opportunity to improve credit score. When a tenant rents to own, they set up a payment plan with the landlord. This payment plan often includes paying extra on top of the rent, which goes towards building equity. The tenant’s payment history is recorded and reported to the credit bureaus, which helps build credit score. Good credit score is essential when applying for a mortgage or other financing, and renting to own helps improve credit score for future reasons.
In conclusion, renting to own is a beneficial option for anyone who wants to own a home but does not have enough money for a down payment or financing. It provides a chance to build equity, flexibility, the opportunity to test the property before buying, and credit score improvement. It is a wise choice for tenants who are looking to buy a home, but cannot do so immediately. Additionally, it provides landlords with a lucrative way of selling their property, as it allows them to earn rent and sell the property at a higher price later.
