What Is the Different Between Renting to Own Verses Leasing to Own!?
Can someone with the knowledge of renting/verses leasing to own detail info. I want to move and sale my home. Either rent to own or lease to own? where do i start, or where can I get some information? Please help!! TY so much!
there really isn’t any difference between renting and leasing in this case. basically, rent to own works like this:
buyer pays for a "buy" option that comes due after a set amount of time. say 2 years. this option states the sale price (usually the current market price, not the value in 2 years) and says that after 2 years you agree to sell the buyer the house for this price if the buyer wants it.
the buyer agrees to rent the house for whatever rental amount you choose and also agrees to maintain the house as if it were his. so he does all the repairs and such.
at the end of the time period the buyer has a right to exercise this buy option and buy the house from you at the negotiated price.
the advantages are, for the buyer, that hopefully the value of the house has increased in 2 years and the bank will lend him the money more easily, and he’ll start out with equity.
for the seller, it may be a way to generate income in a down market.
this option should have a cost. like 2000 or 5000 or whatever is right for the area or such. at the end of the term if the buyer does not want to exercise the option, or can’t for some reason, or terminates the lease before the end of the term, then you keep the money he spent on the option, and he is obligated to return the property in the condition he got it.
that’s basically it.
Filed under: lease rent to own homes
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there really isn’t any difference between renting and leasing in this case. basically, rent to own works like this:
buyer pays for a "buy" option that comes due after a set amount of time. say 2 years. this option states the sale price (usually the current market price, not the value in 2 years) and says that after 2 years you agree to sell the buyer the house for this price if the buyer wants it.
the buyer agrees to rent the house for whatever rental amount you choose and also agrees to maintain the house as if it were his. so he does all the repairs and such.
at the end of the time period the buyer has a right to exercise this buy option and buy the house from you at the negotiated price.
the advantages are, for the buyer, that hopefully the value of the house has increased in 2 years and the bank will lend him the money more easily, and he’ll start out with equity.
for the seller, it may be a way to generate income in a down market.
this option should have a cost. like 2000 or 5000 or whatever is right for the area or such. at the end of the term if the buyer does not want to exercise the option, or can’t for some reason, or terminates the lease before the end of the term, then you keep the money he spent on the option, and he is obligated to return the property in the condition he got it.
that’s basically it.
References :
property investor