Today renting to own is becoming a more and more popular option for some Buyers.
Every now and again, I'll have a Buyer who, although they have good income, and a down payment, because of blemished credit, they are unable to get a mortgage approval. For many Buyers, this is heartbreaking, and they let the dream of home ownership wait.
The issue with waiting, of course, especially in Barrie and surrounding areas, is that every year home values have increased, meaning lost equity and a higher future purchase price.
After speaking with someone I know personally who facilitates rent to own options, and learning more about renting to own, I can see that for many Buyers its a great option.
Renting to own is not for everyone. Renting to own still requires that you have at least 2.5% down, as well as good income. After discussing this option with a Buyer, if they feel it's a good possibility, we would fill out an application and submit it.
From there, the Buyers file is presented to different Investors, in hopes that the Investor will move forward and purchase the home for the Buyer, and the Buyer will live as a Tenant in the home.
It's important to know that the Buyer is the one who finds their future dream home, and the Investor then does their own walk thru of the property to be sure it's a good investment.
From there, the offer is submitted by the Investor and the journey to home ownership begins for the Buyer. The Buyer pays rent, for typically two to three years, with a portion of that going towards a savings plan, while improving his or her credit rating. By the end of the two to three years, the Buyers credit is hopefully much improved, and the Buyer can move ahead in obtaining a mortgage and purchasing the home back from the Investor.
On the Investor side of things, this investment is a great idea. Rather than purchasing a typical rental, with turnover in Tenants, and Tenants treating the property poorly, you own a home for two to three years, with the same Tenant, and one who has personal interest in the home...therefore treating it like their own.
I think that somewhat encompasses the idea of renting to own, and hopefully clears up some of the confusion out there about this option.
If you have any questions or comments regarding this, feel free to email or call us anytime.
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