Editor’s Note:

Long-time readers will know that when it comes to “Rent-to-Own” furniture I strongly believe that it is a “suckers bet” basically charging outrageous finance charges that end up costing you twice as much as the furniture is worth. There are only a few instances where it might be worthwhile. Both are short-term and don’t involve actually taking ownereship of the furniture. The first case is if you are “staging” a home in an attempt to sell it and the other is if you need to live somewhere for a very short period. But today’s article is something entirely different in that it is talking about rent-to-own a house. Once again there are certain circumstances when it might make sense… Tim McMahon~ editor

Rent to Own Lease

It isn’t easy being young in these economic times. Many people in their twenties yearn to have a share in the American Dream. They want to own a home of their own, but student loans and low-paying jobs make it seem almost impossible to afford a home where they can raise their family. Some buy a fixer upper, but that requires putting in a lot of sweat equity and you may not have the time or skills necessary. Yet, there is a way out of this predicament and have a chance to own that dream house. Young couples simply need to evaluate their current living conditions, and look at all the possibilities available in order to secure that future property ownership.

Young People are Renters

Review the facts: young people who do not live with their parents are renters, by and large. They pay the landlord a certain amount of money every month for shelter. This is usually seen as a dead-end situation but it can become an opportunity for permanent housing. The idea is not just to rent a house but enter into a rent to own arrangement. Simply put, the renter agrees to pay the usual rent and a little extra. The landlord, in turn, agrees to put that little extra towards the down payment on the house, granting the renter the option to buy the dwelling after a set number of years. Both have to agree to a concession. The renter has to also pay for the option itself, and the landlord must agree to a set price on the house knowing that it can’t be increased even if the housing market improves. There is a significant benefit for both. The young renter with possibly a poor credit score can improve his or her credit rating while at the same time Saving towards a down payment on the house. When it’s time to go for home loan the credit scores are better and there’s already money for a down payment, decreasing the size of the loan. The landlord has a willing buyer even in the case where the real estate market is bad and he gets money up front.

A rent to own lease has to be negotiated just like any other contract. A writer has to accept that failure to pay the monthly amount on time can result in forfeiture of the down payment figure, and landlord must respect the fact that he or she must continue to cover maintenance costs. Both must also be willing to accept the fortunes of the housing market. A landlord could foreclose, forcing the renter to move without being compensated. On the other hand, a renter might decide not to exercise the option and buy a cheaper house, causing the landlord to lose any advantage of an earlier fixed price. This is all part and parcel of the arrangement.

Benefits of a Rent to Own Lease

The benefits often outweigh the possible risks. The rent to own option is a way that young people can move towards outright ownership of a house. The terms of any lease are simply things that a young person has to learn about, and be willing to be firm about if necessary. The prospect though of being able to rent, improve credit scores by paying off other loans, and still have money go towards the purchase of a house can make this option extremely attractive. Far too many people have had negative opinions of the chances a young person has of owning a house, and claim it is impossible. That’s not necessarily so. A young person or couple can have their chance to secure part of the American Dream. Rent-to-own is a viable path to that desired destination.

See Also:

Rent to Own Lease

Young People are Renters

Benefits of a Rent to Own Lease

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