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Rent vs Buy in Cleveland : Real Estate Advice

  • All529
  • Local Info37
  • Home Buying221
  • Home Selling40
  • Market Conditions22

Activity 6
Mon Mar 16, 2015
Gerald Feenstra answered:
Hi Rachel,

Some sellers are willing to entertain land contract offers which are similar to a rent to own situation. However, under land contract you are entering into a legally binding contract holding you to the purchase of that property. Rent-to-own properties are pretty rare as it takes a very trusting landlord to enter into such an agreement as the tenant could choose to opt out at any time. Most landlords either have a rental property because of the cashflow it brings in, or they are looking to sell a property in full to regain their investment in a cash form. Unless you're able to find a rental property where the landlord is willing to enter into a rent-to-own agreement, you'll likely have to find either a rental or purchase a home.

I hope this information was helpful!

Gerald Feenstra
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Fri Oct 18, 2013
answered:
Good morning Kenan Jue,

Rent To Own is a better deal for the Seller than it would ever be for a potential Buyer.

Key Points of Rent-To-Own:
• Portion of monthly rent payment is set aside by Landlord towards a future down payment
• Landlord/Seller locks you into a price today for a purchase tomorrow
• Forces the Tenant/Homebuyer to save towards down payment
• Tenant/Homebuyer still has to apply for a mortgage in the future to purchase the home
Rent-To-Own "forces" savings towards a down payment. Your Landlord deducts a pre-determined amount to hold in a special bank account, called an "escrow" account until you have saved up enough---through this "forced-savings" method---to meet a down payment to purchase the home.
At the end of the agreement, usually 2 to 3 years, you must apply for a mortgage loan to complete the purchase of the home. The terms of the purchase price, including the down payment amount, and the amount to be set aside from the rental for down payment, are all set down at the time of lease signing.

You can save for a down payment on your own.

If you are dedicated to the idea of buying a home, create a savings plan. When you have enough for a down payment YOU get to decide on the price you're willing to pay for a home based on market conditions.
With Rent To Own you're locked in to the house and to the price. What happens if three years from now your life situation has changed? Maybe you need a bigger/smaller home. Maybe your employment has relocated. Maybe your credit or income is insufficient to qualify for a mortgage loan.

Get Prequalified by a local Mortgage Banker. You may find you're qualified now for a mortgage loan.

Trevor Curran
NMLS #40140
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Fri Jul 1, 2011
Nick answered:
thanks for the answer!

no, i did nothing to breach the contract. in the lease, the owner agreed to care for the lawn and snow removal, he contacted me and told me that he was no longer willing to do it. I said the only way I would do it was if he would lower the rent, because I don't own a lawnmower or snowblower. He then said that he wanted to cancel the lease.. I was outraged!

The owner must really not know what he's doing because he missed out on a full month's rent, which would've easily covered any lawncare expenses for the year, by breaking our lease.
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Mon Apr 25, 2011
Kieran Jackson answered:
Buying a house 9 times out of 10 is the way to go... If you are not a licensed professional, always ATLEAST consult with one before making a purchase!

All the best,
Kieran
0 votes 10 answers Share Flag
Thu Feb 24, 2011
Bexsentico@yahoo.com answered:
Hello Stew,

It is always better to buy a house when you are renting a house you are only making the landlord rich and paying off their house . The same money that your paying in rent you could be using to buy or pay off your own house . Even if you have bad credit and had have problems in the past their are ways and people out there that can help thier is a business in cleveland ohio that helps people like these and others that are looking to buy . Here is a link to the website below

http://clevelandohio.usapropertywholesale.com/
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Tue Feb 1, 2011
Pat & Steve Pribisko answered:
In Ohio, any type of Option to Purchase or Land Contract ("Rent to Own") must be filed in the County Recorder's Office. In your case, the filing would be with the Cuyahoga County Recorder’s Office. This process is to prevent anyone from buying a property that is under contract. Since you have been told that there is a new owner, you may have been mislead. Do you have anything in writing that says rent to own? Do you have a written lease? You really need to talk to an Attorney who handles residential real estate. If you are a low income family, contact the Legal Aid Society. ... more
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