Most people know what 'rent to own' means. Companies like Rent A Center and Prime Time have built their fortunes on this concept. Even if this is the only option for some who have particularly bad credit, the majority of other people would not rent merchandise to own it. Homes are no exception, especially if you are buying a home on a rent to own basis.
Rent to own might seem an inexpensive way of owning something, but it does cost more in the end. Rent to own merchandise for example, may sound quite compelling at a few dollars a week. But, the agreements usually run for about 15-20 months, which is the reason the companies make money. Although you may be paying just a few dollars a week, the total amount quickly adds up to nearly twice the cost of the item.
Aside from paying the rental fee, you are also responsible for sales tax. And just like merchandise, rent to own real estate can be a little tricky as well. Even though it can be great for those with not so great credit, you'll normally end up paying back a lot more than you would with a mortgage. You will still be required to pay back the money borrowed with a regular mortgage, but you won't have to pay as much.
Owners are the ones who usually put houses on the market as rent to own properties. It can be good to deal directly with the property owner. The relationship will probably start as a lease and then it will graduate to become a rent to own transaction if you decide you want to keep the property. You and the owner will then work out an arrangement, which will normally be quite a few years. Some owners are going to be willing to work with you, and they will go to great lengths working out a price that will be satisfactory for both of you, while others will try to charge you more just to make an extra profit.
If your credit isn't good, then you might want to consider rent to own as one of your only options to buy a property. Although some don't like to do it due to the price, for many it's a better alternative than an apartment. Rent to own properties allow you to pay toward something that will, one day, be yours, rather than just paying rent. It works for some people, but make sure you are very clear on the terms before you commit to anything. This way, you'll know how much you'll be paying for the home - and for how long.
Rent to own might seem an inexpensive way of owning something, but it does cost more in the end. Rent to own merchandise for example, may sound quite compelling at a few dollars a week. But, the agreements usually run for about 15-20 months, which is the reason the companies make money. Although you may be paying just a few dollars a week, the total amount quickly adds up to nearly twice the cost of the item.
Aside from paying the rental fee, you are also responsible for sales tax. And just like merchandise, rent to own real estate can be a little tricky as well. Even though it can be great for those with not so great credit, you'll normally end up paying back a lot more than you would with a mortgage. You will still be required to pay back the money borrowed with a regular mortgage, but you won't have to pay as much.
Owners are the ones who usually put houses on the market as rent to own properties. It can be good to deal directly with the property owner. The relationship will probably start as a lease and then it will graduate to become a rent to own transaction if you decide you want to keep the property. You and the owner will then work out an arrangement, which will normally be quite a few years. Some owners are going to be willing to work with you, and they will go to great lengths working out a price that will be satisfactory for both of you, while others will try to charge you more just to make an extra profit.
If your credit isn't good, then you might want to consider rent to own as one of your only options to buy a property. Although some don't like to do it due to the price, for many it's a better alternative than an apartment. Rent to own properties allow you to pay toward something that will, one day, be yours, rather than just paying rent. It works for some people, but make sure you are very clear on the terms before you commit to anything. This way, you'll know how much you'll be paying for the home - and for how long.
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