Which means you are sick and tired of renting. You wish to own your house, but you will not have a great deal of downpayment. No doubt you have heard of “the perfect solution” – rent to own. But is it really as perfect as everyone says – hardly. There are several secrets about rent to obtain properties you will want to find out about. They may be most overlooked elements of a rent to have deal. So why don’t we find out the truth about lease to own homes.
How Rent to possess Works
Thus, making this the way it operates. You rent a home using the substitute for buy. You’ll have a lease which will typically last between Two or three years. The seller will even require that you put some form of upfront down payment or option fee. Normally, this is 1 to 7 percent of the decided purchase price. Besides the rent, you will be paying what is called a Rent Premium or Rent Credit. This extra amounts put towards the purchase price of the house.
Let’s see what sort of Salt Lake City, Utah rent to possess would work out. At the time of January, 2017 the median rent to get a 3 bedroom, 2 bath house in Salt Lake City is $1,500. Now the additional amount that you’ll pay towards purchase is negotiable. Generally you should expect to spend 20 to 50% higher than the market rent. In the interest of argument, let’s choose 25% that is about average. So you’ll pay $1,500 a month in rent and an additional $375 for the purchase. If the lease lasts Several years, you would possess a rent credit inside the amount of $13,500. Median home values in Salt Lake City are $280,000. In case you paid a 3% option fee of $8,400 and combined by using the rent credit, you’d probably get a advance payment of $21,900 or 7.8%. Pretty good.
The certainty concerning rent to own programs
Do you want to understand the dirty little secret few buyers within your position realize? Should you think that you might be unable or unwilling to choose the house following the lease agreement, you forfeit Every one of the money you have paid. That also includes the Rent Premium along with the option fee. Gone. Everything. The seller keeps all the money and you also arrive at call a moving van and start throughout.
Selecting surprised about how many times such things happen. The customer might run into some difficulties with your home and they also want out. Money lost. The client may not be capable of be eligible for home financing. Money lost. Or, think the seller doesn’t give the mortgage along with the property gets foreclosed on. Yikes! Money lost.
So, before you race to snap inside the closest rent to obtain or lease option property, make sure you do your homework and possess the house inspected. Begin working using a lender to be able to be eligible for a a mortgage as well as goodness sake, be sure to really like the house.
To get more information about rent to own listings you can check the best web site: this