hgonzalez30, Home Buyer in Corpus Christi, TX

I am buying a house and I am going to rent to own. Is this a smart thing to do?

Asked by hgonzalez30, Corpus Christi, TX Wed May 28, 2014

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It really depends on what you negotiated, and what are the terms and conditions. I have seen buyers that exercised the option to buy, and they made a good deal.

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0 votes Thank Flag Link Wed Aug 13, 2014
You aren't buying a home if you are in a 'rent to own' contract. These are typically a very high risk on the part of the tenant--and you are considered the tenant until the title to the home is in your name.
0 votes Thank Flag Link Wed Jul 23, 2014
Hgonzalez,
Each situation is different, but for most people it's not. A rent to own generally requires an up front non-refundable deposit and over market rent. Your initial deposit and a small portion of the rent may accumulate to be used for your down payment, but only if you can get a mortgage when the option is due. Most people in these situations are worse off when this happens and lose their deposit and extra rent payments. Landlords love them, they can "rent to own" the same house over and over and make extra money.
My opinion is that most people are better off renting the cheapest place they can stand to live in and addressing whatever issues are keeping them from doing an outright purchase now. Fix your credit, save the down payment, pay off your bills, whatever it takes.
In a Rent to own, you are a renter, not an owner. The real owner can lose the house in foreclosure or try an change terms or even sell it out from underneath you. There is just too much risk and not enough reward. On top of this, very few landlord/sellers are willing to do this, so your selection of homes is few and far between.
You may have the diamond in the rough and the ideal situation, but for the vast majority, its a bad choice.
0 votes Thank Flag Link Wed May 28, 2014
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