What is...Rent-To-Own?

solution to owning a home through Rent-to-own

Rent-to-Own is a home ownership process bound by a
contractual document between the landlord and the
tenant. The contract is a rental agreement with the
option to buy the property at an agreed upon price,
within the time frame (e.g. 1 to 2 years.) set in
the contract. In other words, it is a contract at a price set
today with the option to buy it in future. An important
point to remember is there is no obligation on the
tenant’s behalf to purchase the property. The tenant can
buy the property at any time prior to the final date of the
contract, or walk away...tenants choice.

Benefits of living in a Rent-to-Own home:

p You can move into your home right away, potentially
building equity and appreciation in the property while
you prepare your finances/credit to purchase in the
future.

p Getting into the property typically requires "Option
Consideration Money" (non-refundable), usually between
1%-5% of the price on the home. "Option Consideration
Money" is similar to a Down Payment. This "Option Consideration Money" can be credited to the purchase of the home.  Sometimes the property owner will allow the "Option Consideration Money" to be made in several monthly installments or simply add it to the rent over the 12/24 month period of the contract.

p From day one, we have financing professionals that can assist you with a financial plan to purchase the property by the end of the contract.  Please complete the Pre-Screen information to get you started.  This will allow us to determine a strategic plan of action towards purchasing your home.

p Improvements can be made to the property as if you own it. This is beneficial for you because it will raise the value of the property (equity) which will all be credited back to you!  Keep in mind that from the beginning, the purchase price is fixed and any appreciation turns into equity for you once you purchase the home.

p Often, the property owner will give you rent credits towards the price of the home if the monthly payments are made on time.  For instance, you make your monthly payment on time; the property owner will credit you $200 for that month.  After 12 months, there will be $2400 of rent credits for you to use in purchasing the house.

p Let's look at this example: 

Price of home to be purchased	$200,000
Rent credits after one year	-(2,400)
Option Consideration Money	-(5,000)
Purchase price of home in one year	$192,600
Price of home to be purchased	$200,000
Potential appreciation in one year	+6,000
($200,000 x .03 = $6,000)
Potential value of home in 12 months	$206,000
Potential value in 12 months	$206,000
Purchase price of home in a year	-192,600
Potential equity in Property/Rent-To-Own	$13,400
Equity in Property/Renting	-0-
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