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Rent to Own Home
Rent to own home is another way to go from renter to homeowner fast in San Antonio Texas. It is one of the most creative home finance alternatives if you have bad or no credit. Renters who want to buy but are not currently able to buy may be able to secure a home they want to own in the future by renting it first. This option is favored by a lot of owners and property managers, because it attracts good tenants.
Rent to own home is exactly what it sounds like – the renting tenants sign an agreement with a landlord or company stating that they can buy the property at the end of a prearranged time period at a set price.
Issues that are addressed in the rent to own home agreement are as follows:
- Down payment: There may be an earnest money deposit required. This is money held by a title company & kept in escrow until the option to buy is exercised.
- Purchase price: The purchase price is set according to today’s market, not in the future when the option to buy is exercised.
- Legal title: The tenant becomes a purchaser only upon exercise of the option to buy. This means the title will remain in the owner’s name until the landlord-tenant relationship ceases and the option becomes an absolute and binding contract of sale.
There are benefits for both sides in this type of transaction. The homeowner continues to receive rental income and gets to have the income tax deductions as long as they own the home. For the buyers, who will be the ones doing the rent to own home program they get more time to qualify for mortgage financing and depending on the agreement, receive a portion of the money paid as rent reflected toward the home sales price. Not to mention the joy of knowing soon the home will be theirs.
If interested in this type of alternative home ownership, please contact me so we can discuss it further. I will be happy to answer any questions you have about a rent to own home program and will be able to help you throughout the process.