Rent to Own Home

[Teallaura]

Anyone have any experience with this?

[rogue06]

Anyone have any experience with this?

No. But from what I know avoid if at all possible. You'll pay a lot more than what it's worth.

[Littlejoe]

It's how I bought the house I'm in now. But I knew the person I bought it from very well, and so I was never cheated (in fact just the opposite), but I don't know that my experience is normal. I probably paid around market for my house at the time, but it was in bad shape from years of renters basically destroying the house, so I got it on very favorable terms. i.e. low rent, which allowed me to put money into improvements. I think the key is to make sure the contract is fair before hand...which knowing you, it would be.

[rogue06]

It's how I bought the house I'm in now. But I knew the person I bought it from very well, and so I was never cheated (in fact just the opposite), but I don't know that my experience is normal. I probably paid around market for my house at the time, but it was in bad shape from years of renters basically destroying the house, so I got it on very favorable terms. i.e. low rent, which allowed me to put money into improvements. I think the key is to make sure the contract is fair before hand...which knowing you, it would be.

To be honest I was thinking of furniture and appliances and not houses.

[Teallaura]

Thanks Guys.

Yeah, I have houses in mind.

[rogue06]

Thanks Guys.

Yeah, I have houses in mind.

Well, in that case, in the immortal words of Emily Litella:

Emily-Litella-Never-mind.jpg

[Cow Poke]

The biggest problem with a rent to own for a house is that the person desiring the house is usually in a bind, and the seller knows that.

They'll often set the rental rate within reach, but the conversion to a buy is at a price or terms far more than what you might have done had you started it out as a purchase.

And there's the matter of how much of the rental amount applies to purchase. In some cases, 50% of what you paid in rent can be applied toward the purchase price, but that varies wildly.

The "hook" is -- you need a place to live, and you're a bit desperate, so you might agree to purchase terms (price, interest rates, down payment, etc) that are not the best. After you've paid a year or two (or five) renting, you feel like you're abandoning that money if you don't convert.

The "plus" is that it offers people with no down payment an opportunity to "build equity" (so to speak) in the house, and use that rent equity as part of the down payment, or to continue saving down payment while renting.

[Teallaura]

Thanks, CP, that's pretty much what I figured.

[Cow Poke]

Yeah, so if you can find somebody like LJ cited - sounds like somebody cared about him and "worked a deal", it's great.

I actually was in a rent to own when I was younger, but we discovered that the area behind us was going to turn from woodland to commercial development, and there would be a convenient store right behind my back yard. Also, the community had a swimming pool, and I heard that the management team was facing bankruptcy.

Toward the end of the first year, I exercised my option NOT to proceed with the purchase, which cost me $500.00, and none of the rent went toward purchase. But, hey, it was rent! However, they did, indeed, clear the land behind me and build a convenient store, and the community pool / club did indeed go bankrupt and close, becoming quite an eyesore.

So, it was $500 well lost.

[Cow Poke]

To be honest I was thinking of furniture and appliances and not houses.

You thought you were in the "Rent to Own TV" thread instead of "Rent to Own Home".

[Teallaura]

Yeah, so if you can find somebody like LJ cited - sounds like somebody cared about him and "worked a deal", it's great.

I actually was in a rent to own when I was younger, but we discovered that the area behind us was going to turn from woodland to commercial development, and there would be a convenient store right behind my back yard. Also, the community had a swimming pool, and I heard that the management team was facing bankruptcy.

Toward the end of the first year, I exercised my option NOT to proceed with the purchase, which cost me $500.00, and none of the rent went toward purchase. But, hey, it was rent! However, they did, indeed, clear the land behind me and build a convenient store, and the community pool / club did indeed go bankrupt and close, becoming quite an eyesore.

So, it was $500 well lost.

Yeah, I'm thinking it may be my best option at the moment

[Cow Poke]

Yeah, I'm thinking it may be my best option at the moment

Remember - it doesn't hurt to try to negotiate terms - the worst they can say is no.

You're smart - besides cute - so you'll do fine. If it turns into a purchase opportunity, more power to ya!