If you're looking to buy a house to live in, rent-to-own, you're going to get clobbered. If you're an investor looking to get into a property and finance your way out of it relatively quickly, you might be able to make the numbers work.
To my mind, the test is simple - if your credit will allow you to qualify for a mortgage and you have the cash on hand to make the deal happen, rent-to-own isn't for you. And if you can't qualify for a mortgage, then you shouldn't take on a rent-to-own.
That is not true.
A properly structured one is advantageous to both buyers and sellers. For example:
*A lease-to-own can let you control (via the option) the home today, even though you might not be in a position to buy it for years.
* A lease-option property gives you the right but not the obligation to buy. So if prices drop, you can simply walk away. If you'd bought the property, you'd be "upside down" or "under water."
* A lease-option generally builds up your equity faster than a 30 year amortized mortgage will.
* Looking at lease-options gives you a wider range of choices than just looking for properties for sale or properties for rent.
* A lease-option locks in a future price today. Consider: Lots of areas that are "hot" now weren't 3 or 4 years ago. What if you'd been able to lease-option a house in one of the currently hot areas a few years ago when things were much slower...and prices were much lower?
* The option fee for a lease-option can be (should be and usually is) less up-front money than a down payment would be.
I could go on and on, but you get the idea. Properly structured, lease-options can be highly beneficial for buyers.
Hope that helps.
If you have any further questions, please give me a call at 860-262-1203.
SC Real Estate Network
It depends on how the contract is structured. But it can be fair & have advantages for both parties. I would definitely suggest using an agent experienced in Lease Option Purchases or consult an attorney.
If it is the only way for one to purchase a property, then it is advantageous for both sides (In most cases). The leases in question must be taken on a case by case basis. I am a firm believer that it is far better to own in this economy then it is to rent.
Email me and I will email you ALL of the lease to own properties listed. email@example.com
Michael J. Costello
Sea and Sand Realty
Myrtle Beach, SC.