Learn more about homes for rent by owner in Surprise
… And discover whether renting-to-own is the right step for you. Find out how it works here…
If you’re looking into homes for rent by owner in Surprise, you’re probably thinking about renting… but have you thought about renting to OWN? In this blog post, we’ll share the step-by-step method to walk you through how it all works so you can decide if it’s right for you…
If you’re thinking about renting a home, you’re likely focused on finding a place to rent that you can call your own… but often, renters would love to move up from a rental property into a home that they own and begin building equity in the property, they just might not be able to afford it right now.
That’s where rent-to-own comes in. With renting, you pay for a place to live for as long as your rental agreement lasts. But with rent to own, you rent a home for a while and then you buy it out-right so that you own it… and you can even do this with bad credit!
Renting to own is an alternate route to buying or selling a home when conventional bank or mortgage company home loans are not an option. There are two types of rent-to-own contracts. 1) Lease-option contracts give the renter the option of buying the home but does not obligate the renter to do so. 2) Lease-purchase contracts, which are less common, require that the renter purchase the home. A small down payment is agreed upon along with other items such as additional down payment paid over time, length of rent period to build credit score up and finally a target date for full purchase. It is important that the buyer and seller agree upfront about the terms of the contract to avoid misunderstandings down the road. Obviously the details are spelled out in a formal contract.
Rent-to-own agreements have two components: a lease and an option to buy. Agreements typically require an upfront, non-refundable down payment called the option fee. This ranges anywhere from 1% to 5% of the purchase price. Often, a portion of the down payment goes toward the eventual purchase of the home.
For the duration of the lease, renters pay a monthly rent. Some contracts also require renters to pay for certain home repairs and maintenance costs that go beyond typical tenant obligations. The whole idea is to actually take on the full experience of “ownership” since this hybrid method allows the renter to be a full owner in responsibility — just getting the opportunity to pay a small down payment and build up a higher credit score to qualify for a standard bank loan that they would not have been able to do with a traditional sale. After an agreed amount of time, typically one to three years, the renter may then purchase the home for the price stated in the agreement.
Whether you are the buyer or seller, it’s important to work with experienced Surprise or real estate agents or seller who has prior experience with rent-to-own agreements. Lease-option and lease-purchase contracts can be complicated and it’s important that qualified experts help you understand your rights and responsibilities.
Let’s start with the benefits of why renters love it…
1. You can get into a house even if you have bad credit
2. You don’t need a huge down payment
3. You can live in your permanent dream home sooner, even if you can’t afford to buy it just yet.
It’s no wonder why people love rent to own!
Here’s How It Works To Get Into Homes For Rent By Owner In Surprise On A Rent-To-Own Basis
First, find homes for rent by owner in Surprise.
Second, inquire about whether any of their houses are rent to own.
Third, review the available homes and choose one that you’d like to buy someday.
Fourth, sign the agreement, which means you’ll rent the house for a period of time (often a couple of years) with the purpose of buying it later.
Fifth, work with an experienced and reputable credit repair service and work on your credit score to improve your credit during that time.
Sixth, when your rental agreement draws to a close, use your improved credit score to apply for a mortgage from a bank and then purchase the house from the owner.
Yes, it really is that simple and it’s a great way for renters to become home owners.