There are different ways that you could own a house but a rent to own contract is one that most people are yet to know about. A rent to own contract is one with an option to purchase the home one is renting on a predetermined price when the rental period expires. The moment you pay the rent , a portion of it goes to equity and building your credit. In exchange the home buyer is allowed to purchase the home on a settled price regardless of where the value of the real estate goes. Having the option does not mean that the potential buyer is forced to buy the piece of property .
Make no mistake of thinking the amount reduced on the rent is a security deposit , it just helps with locking the amount negotiated so that the price will not go up even if the real estate market abruptly goes up. There are instructions to make sure that you observe if you have taken out this contract, you have to treat the property as a rental and make sure that you pay rent on time. If you wish to make some changes to the property you have to get the approval . In the rent to own you will be paying more rent than in normal rental properties but it’s because there is an amount going towards the final purchase of the house .
Rent to own is somehow similar to having a forced saving system to help with your down payment once the period comes to an end. Many of the rent to own agreements will require the renting party to handle some small repairs but this is after the rent to own period has expired. If a house needs major repairs such as with some structural issues the house owner has to take care of that until a new home buyer exercises the option. Rent to own homes also help the renter to develop good credit ratings that will help them emerge from prior financial tight spots.
With such contracts you do not want to take any chances, bring in a professional property inspector to inspect the property and recommend it. You do not have to worry if you are dealing with a reputable rent to company as they will put you in touch with qualified inspector of properties. In some rent to own contracts the potential home owner is allowed to test the neighborhood where the property is to feel if they are comfortable with it. Mortgages are not always assured especially in environments where there are some tough financial polices at play that do not favor the bank, rent to own option becomes an ideal option for you here.