Can you really buy a home by rent to own.....or should you not go this way to buy a home ?

Answer 1

if you are looking to generate income

Answer 2

Rent to Own, is one of about 25 to 30 different methods of more or less established "legal" methods of creative financing.

The process is relatively simple, and in essence is an agreement to buy in the future at some pre determined date, at a pre determined price. In the interim, you rent the property, with part or all of the rental payment to go towards a downpayment.

In some cases the mortgage that is placed on the property is also pre-arranged, in fact you will have to be qualified to get the eventual mortgage at the time of arranging the rent to own purchase.

In some cases the mortgage is offered and held by the seller and or the financial department of developers, and there agaian it is a matter of checking if the terms and conditions are suitable to your situation.

Now on your question if this is a good way to buy a home, when everything is said and done, only you can answer that question.

I can tell you that is everything else is the same , and it is the only way for you to enter into the market at this time, I would go for it. Why, because we still feel that it is better to own real estate and get the benefit of the value increases over time "tax Free", compared to paying some-one elses mortgage.

If you have other options to buy a home, you then need to compare those finacial decisions on their own merritt. In the end most initial home purchases are in my mind stepping stones, meaning that the first 3 or 4 properties are not the homes of your dreams, but homes that allow you to built equity, and an asset base from which you add value, and built towards owning your dream home and possibly also own a few revenue properties to look after you in retirement.

So if this property you are considering, allows you to
a. enter the market place, now versus a year from now, that is a good thing.
b. allows you a possibility to add value to it, and or create additional revenue from it, that would be a good thing
c. if it appears that you can either sell it at a great profit a some time in the future, or to refinance it and rent it out so that you can do the same thing again on another property, that would be a good thing.
d. if this is your dream property, that would be a good thing.

So if the options are, to buy or not to buy, buy the property and get your foot into real estate as it will always be better than renting, unless the ocation is so bad that the town is dying and someone forget to tell you.

with all that talk about a slowdown in the economy prices in Canada are still going up, may be a little slower, but over any 7 to 10 year period, you will always do well with property, and if the possibility exists that you may own this one for ever, the value today is really not that important, as long as it is at or below market value.

Read books like "rich Dad poor Dad" the millionaire real estate investor, and real estate investing in canada, and anything written by Donald Trump and Robert Kyosaki all of which are available at any good bookstore or amazon.

surround yourself with a team of experts in their field, a great accountant, a lawyer, a handyman, a property inspector and yes a great realtor. In real estate as in all business, no one succeeds alone,


Good Luck, and happy house hunting

Answer 3

I'm currently looking into a rent to own condo. It's a brand new development out in the ritzy suburbs of my hometown. It's completely legitimate. I can choose whatever mortgage company I want.

We have to sign at least a six months lease, and the development will apply three months of the rent toward a down payment.

We're both skeptical people, so we've researched this heavily. Some rent to own situations are indeed scams, so be careful. But there are some good ones out there.

Answer 4

First try and see if you can get a mortgage with 100% financing. I know of lenders that will give clients financing with previous credit issues. The problem is that with your rent to own agreement you will still need a mortgage to buy this property. How is your circumstances going to improve in the short term to enable you to buy a property? If your credit is bad will it improve next year, how do you plan on improving your credit to get a mortgage? How much of your rent will be assigned to a down payment, you will need proof for the lender who will give you a mortgage. I work with real estate investors who have used this as a way to sell there properties, usually the renter can't get a mortgage and moves on and loses the money that was assigned to a down payment. If you want more info go to www.albertamortgageguy.com

Answer 5

You cant by a home by rent to own . If you are interested in buying a home, you can get a morgage. Depending how long you plan on living at the location, renting or buying differs. If you want a fixed location, or plan on living there as long as possible, you should buy a house on morgage. It is way better than rent, and some banks offer great, or better deals than others. If you are planning on moving to a location but are not sure if you will stay for as long as possible, then perhaps rent might work better for you.

Answer 6

It can be done, and may be a reasonable way to proceed if you have little money for a down payment. The normal vehicle is a "contract of sale", and is complex because you are negotiating two separate agreements at the same time: the rental agreement, and the sales agreement, and there is some interlock between them. The sales agreement is typically in the form of an option to purchase, and part of the deal should be to execute and record a Memorandum of Option so that potential future purchasers are warned that the property is entailed.

Answer 7

if you are used to renting and you are renting anyway yes that would be a great way to buy your first house. Its not a bad way to buy one but if you can afford a mortgage then go that way its really up to the person and if it is right for that particular person. Its not a bad idea to do that.

Answer 8

ANYTHING you buy with the rent-to-own policy is a rip off. Why not save up $20K-$40K for a downpayment instead of spending 20% more on a house?

Basically if you REALLY need a house, just rent.

If you REALLY want to buy a house, save up a nice down payment and go from there.

Don't just settle on a house because it's rent-to-own. In the end you'll wish you would have just waited until you had the money.

Answer 9

Many more homeowners are choosing to sell their homes this way these days. It is so much a buyers market as opposed to a sellers. Make sure the contract drawn up is binding and legal and filed and notorized and all that happy stuff and start realizing (limited) benefits of homeownership!

Answer 10

You can. I know a friend who bought his first house this way. And with the housing market the way it is, it is a great time to try it. Good luck!

Answer 11

If you don't have the down payment, that's the way to go.