Rent to Own or Lease Option can be a blessing in disguise or your worst nightmare. I am a Realtor but began my real estate career as an investor. In fact, I am still an investor as well as a Realtor. At one time I specialized in Lease Options but as the market changed, I switched my focus to helping people facing foreclosure by concentrating on short sales. I can discuss the good, the bad and the ugly of lease options.
If the contract is written correctly and you know what items could cause problems in the future, you can protect yourself in the contract. Lease options are an amazing way to get into a home as a future homeowner with a small amount down and a payment equivalent to what you would pay for rent. Many times a portion of your monthly payment is credited to the principal. It buys you time to get your finances in order, raise your credit score and determine if this is truly the correct house for you. If you would like to discuss all the issues that you would face both good and bad with a lease option, feel free to give me a call. I have been on both sides of the equation as both the buyer and the seller on lease option transactions.
Kathy Persha, Realtor
Keller Williams Realty
Let me share what happened to my neighbor with this situation.
Paid a few hundred dollars a month over market rent. This amount was to be put toward the down payment. Neighbor was in the home for about 2+ years.
This was about $6000 extra toward his down payment.
About 2+ years into this arrangement, he came home one day and saw a sign on his front door that he had 3 days to get out of the property. The home had gone into foreclosure and he was being evicted by the bank.
He had to scramble for a new rental.
He never got his $6000 back from the sellers.
I would suggest having a third party (an attorney) handle this for you and handle the money and the house payment for you.