Rent to own homes

[eve16v]

Has anyone ever done this or know how these work? The bf and I have been saving to buy a house or townhouse. We have a good amount saved for a DP, but we aren't quite ready to go out and buy yet. However, we badly need to get out of where we're at now. And we are having a hard time justifying renting.

With the rent to buy, does part of the rent go towards a dp on the home? I tried to look for some info, but there wasn't much that I could find. I assume it is different from home to home. Any input would be great.

TIA

[scrapper]

Well if you do a lease with an option to buy make sure a attorney draws up the documents nnn don't give a dwn pmt Because if the property goes in foreclosure you could lose out on your downpmt. Make sure its recorded at the court house nnn see if you could pay the lender directly instead of the home owner. I have seen people get hurt by the property owner by taking the dwn pmt and monthly rents nn let the property go in foreclosure. That's why i recommend a attorney.

ooh yeah the terms of the lease can be structured just about anyway i have herd of those putting portions of monthly payments being applied towards principle.

Modified by scrapper at 8:39 AM 8-15-2007


Modified by scrapper at 8:49 AM 8-15-2007

[eve16v]

Quote, originally posted by scrapper »

Are you talking about a lease with the option to buy.

Bascially, yes.

[ImRollin]

Quote, originally posted by scrapper »

Well if you do a lease with an option to buy make sure a attorney draws up the documents nnn don't give a dwn pmt Because if the property goes in foreclosure you could lose out on your downpmt. Make sure its recorded at the court house nnn see if you could pay the lender directly instead of the home owner. I have seen people get hurt by the property owner by taking the dwn pmt and monthly rents nn let the property go in foreclosure. That's why i recommend a attorney. ooh yeah the terms of the lease can be structured just about anyway i have herd of those putting portions of monthly payments being applied towards principle.

If you don't give a down payment than what is the point of a lease to own option for the buyer/seller? It is basically a forced savings of a down payment. If you the buyer backs out of the agreement I as the seller should be entitled to a portion of that money.

What are you going to record at the court house? You have no ownership of the property but only a right to purchase a property at a set price or a to be agreed upon price.

What are you paying directly to the lender?

Myself and various family members have done 10+ of these in the last 2 years.

[scrapper]

I was just saying to be cautious because i have personallly seen multiple people lose over 15 k on lease with option to buy. It can be recorded if it is set up as a legal land contract. With this in place it will be recorded on the title to the property. On a lease with option, the seller (in most cases) has a mortgage on the property. You have to trust that they are making the monthly mortgage payment when you give them your rent. In our area recently there has been a number of investors that are taking on leases with option to buy and not turning over the rents received to the mortgage company, therefore the home goes into forclosure and the prospective homeowner is put out without a refund of the amounts collected at the time of the lease with option signing. This is why I say to be cautious. A land contract is carried through the court so long as it is recorded at your local register of deeds. I know of an investor that was writing lease with option to buy contracts and he went into forclosure on about 10 of them recently. The prospective homeowner's had no recourse legally because the documents that were signed would not hold up in court. BUYER BEWARE. There are shifty people out there in this industry so I highly recommend before handing any money over to anyone, an attorney should be utilized. Do it legally and you should be safe. Legal land contracts are good (if you are dealing with honest people) and it will help you to become a homeower.

[ImRollin]

Quote, originally posted by scrapper »

I was just saying to be cautious because i have personallly seen multiple people lose over 15 k on lease with option to buy. It can be recorded if it is set up as a legal land contract. With this in place it will be recorded on the title to the property. On a lease with option, the seller (in most cases) has a mortgage on the property. You have to trust that they are making the monthly mortgage payment when you give them your rent. In our area recently there has been a number of investors that are taking on leases with option to buy and not turning over the rents received to the mortgage company, therefore the home goes into forclosure and the prospective homeowner is put out without a refund of the amounts collected at the time of the lease with option signing. This is why I say to be cautious. A land contract is carried through the court so long as it is recorded at your local register of deeds. I know of an investor that was writing lease with option to buy contracts and he went into forclosure on about 10 of them recently. The prospective homeowner's had no recourse legally because the documents that were signed would not hold up in court. BUYER BEWARE. There are shifty people out there in this industry so I highly recommend before handing any money over to anyone, an attorney should be utilized. Do it legally and you should be safe. Legal land contracts are good (if you are dealing with honest people) and it will help you to become a homeower.

I understand what you are saying for the most part but still have some issues with specific things that aren't really worth arguing about.

On the same token there are shady renters out there that end up filing fradulent land contracts etc and taking out loans etc on property they don't own.

[Paluminati07]

actually hes right man. You can never be to cautious, especially whats about to happen with the foreclosure numbers. Been happening and lots more to come.

[tyrone2]

OK, well Ive had a positive experience with Rent to Own (my wife and I, I should say.) We tried iRent to Own and Home Star Search to find a rent to own home in Chicago (where we now call home).

Ill say this: Watch your finances. You need to see whats available to you. If RTO is the best option (is for some people - and not necessarily for others), then pursue RTO. Don't overextend yourself (just like anything else).

Make sense?

[GeoffD]

The problem with rent-to-own is that you give up all your flexibility. There might be another property down the street you can pick up for far less money a couple of years from now. You're better off controlling your spending, saving up the down payment, and buying on the open market.

[RENOG]

The problem with rent-to-own is that you give up all your flexibility. There might be another property down the street you can pick up for far less money a couple of years from now. You're better off controlling your spending, saving up the down payment, and buying on the open market.

In theory yes, in reality no not so much. I've known many who did the rent to own thing, and that was never a concern. Unsually the only person that will bring that up out of concern are realtors.