The rent to own marketing you see verywhere is usually not a good deal for the Buyer/Renter.
In order to enter into a Lease/Purchase(Rent to own) agreement, you must have a down payment. Then you agree to pay so much every month. A portion of your monthly payment is considered rent, with a small portion going into a savings account toward your closing costs. Usually in my professional experience, these Sellers of Rent to Own deals, are only offering the property as a Rent to Own, because they could not sell it on the open market for the price they wanted. That means they wanted more than Fair Market Value for the property.
Remember, Fair Market Value is the highest price someone would pay for the property in today's market. Chances are if it didn't sell on the market, it was overpriced. Yet now that Seller finds a Tenant who has a sizeable amount to put down. That Tenant/Buyer can afford the higher monthly payment, but for credit or whatever reason, the Tenant/Buyer can't qualify for a mortgage at the present time. The Buyer gets taken advantage of by their own wish and desire to OWN their home, so they go into contract to settle at some time in the future at a certain price. That price is usually way too high. Plus the rent doesn't usually apply to the purchase price. So it turns out to be similar to buying an option today to buy a house in the future for a price above market value.
The best option is to rent for now. Find a Realtor and Mortgage Specialist to work with you to help you prepare to buy a house on the open market. The mortgage specialist can help you establish, build or repair your credit. The Realtor can help find that dream home and negotiate a great deal for you.
Please feel free to call me if you would like to discuss this further. I'd be happy to help you.
Have a Happy Healthy & Prosperous New Year. Don't get suckered into a bad deal!
All the best,
Larry Lichtman, CNE
REALTOR, Property Manager
Your Real Estate Resource For Life
Cell/Text: (267) 254-7994
Real Estate Sales & Leasing
Property Management & Insurance
1611 Snyder Avenue
Philadelphia, PA 19145
Office: (215) 271-7070