{"id":13094,"date":"2022-10-11T10:10:33","date_gmt":"2022-10-11T09:10:33","guid":{"rendered":"https:\/\/www.propertypro.ng\/blog\/?p=13094"},"modified":"2022-10-11T10:10:33","modified_gmt":"2022-10-11T09:10:33","slug":"all-you-need-to-know-about-rent-to-own-properties","status":"publish","type":"post","link":"https:\/\/propertypro.ng\/blog\/all-you-need-to-know-about-rent-to-own-properties\/","title":{"rendered":"All you need to know about Rent-to-Own Properties"},"content":{"rendered":"

A rent-to-own agreement<\/a> allows would-be home buyers to move into a house right away. With several years to work on saving for a down payment before trying to get a mortgage. Here’s all you need to know about Rent-to-Own.<\/p>\n

Rent-to-own<\/span><\/strong> allows prospective buyers to lease a property with an option to buy. A rent-to-own agreement is a deal in which you commit to renting a property for a specific period; with the option of buying it before the lease runs out.\u00a0<\/span><\/p>\n

How Does Rent-to-Own Work?<\/span><\/h2>\n

In their contract, the buyer and seller agree on the price to be paid for the house. Regardless of the home’s value, the buyer can acquire it for that amount soon. To take into account anticipated gains in home values, rent-to-own home prices frequently exceed market rates. The buyer benefits if the home’s value has increased more quickly than anticipated. The tenant may leave if the house’s value drops. When the time comes to buy the house, buyers typically apply for a mortgage.<\/span><\/p>\n

Buyers typically pay an option premium upfront or in equal increments tied in with their rent payments; often up to 5% of the ultimate purchase price. The payment is non-refundable, but it can be applied to the down payment.<\/span><\/p>\n

Contracts also establish the amount of monthly rent plus the extra amount the renter pays each month. The additional amount is usually credited to the final purchase price, so it reduces the amount of money the buyer has to come up with when buying the home. The extra rent is nonrefundable. It compensates the seller for agreeing not to sell the property to anyone else until the agreement with the renter ends. Contracts should also stipulate who is responsible for maintenance during the rental period.<\/span><\/p>\n

Is Rent-to-Own Worth It?<\/span><\/h2>\n

Rent-to-own agreements make sense for some buyers, but not for others. If you have shaky credit or need time to save a down payment, rent-to-own may be the right choice for you. A lot depends on your finances and the state of the housing market.<\/span><\/p>\n

Pros and Cons of Rent-to-Own for Buyers<\/span><\/h2>\n

Pros\u00a0<\/span><\/h3>\n