Rent-to-Own
I wanted to start a discussion about rent-to-own to discuss how it works, the advantages/disadvantages and hopefully have some CP-ers share their experiences.
Defined
Rent-to-own can be a very complicated agreement but generally here's how it works.
The rent-to-own (also known as lease-to-own) process works similarly to a car lease. The Tenants pay their agreed upon rent every month and at the end of a set period (usually 36 months), they have the option to buy the house.
Each month of rent from the Tenant is income for the seller, but a portion goes towards a down payment to eventually buy the home. This portion is usually above and beyond the Owner's mortgage and operating costs.
I cannot stress enough that both the Tenants and the Owner need to be very clear about the contract/lease they draw up before they sign and agree to this arrangement.
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