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I would like to rent to own a house, Where Would I Start?

I Would Like To live In The Zip code 90305

  • April 23 2013 - Inglewood
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Answers (5)

There is some great information on prior posts here, use it.

It would not benefit for me to duplicate their advice but I will tell you what not to do from what I have seen go terribly wrong.

Make sure the property owner for the property you are interested in is not behind in their payments, and on the brink of foreclosure.

If you pay a large sum up front and/or increased rent to be applied to your downpayment and you walk away, you walk away from that money.

I am certain there must be a few rent-to-own real estate agencies out there, but I have not seen many. Utilize a real estate agent that works with rental properties and properties for sale...not just rent-to-own. They will guide you appropriately and not place you in a property for a high fee.

Rent-to-own is a good option for some, but not for everyone.

A contract is only as good as the two that sign it.
  • April 26 2013
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WetDawgs has a great answer, item number 3 is the most important, you need to qualify for the home loan...
I know some people that could not qualify and lost their options...
The landlord won and sold the property to other people.
If you talk with a realtor, like myself, they have lenders who will tell you what you qualify for right now for investing in a home at no charge to you, you may find the purchase being about equal with rent right now...

  • April 24 2013
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  • April 24 2013
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Profile picture for wetdawgs
While the theoretical concept of rent with the option to buy may seem attractive, some of the realities are considerably less so.

Owners who will consider rent to own are very rare, so it will cut down your options for properties considerably.   I consider it much smarter to spend a year or two working on improving your credit and (if necessary) saving up a good down payment.   Yeah, it is tough to move but it even tougher to lose a lot of money attempting to buy.

Some features of rent to own:

1.  Down payment required - often substantial (say 10%) and is non-refundable if the potential buyer doesn't purchase.

2.  Monthly rental is above fair market rent, with the only amount going to purchase is the amount above the fair market rent.  This is also not refundable.

3.  If not qualified for financing at the agreed upon  time and price, then you lose everything. 

4.  The price is agreed upon at the beginning of the contract, and who knows where house prices are going.

5.  You still depend on the owner to pay their mortgage.   If they fail, you lose.

If you do get involved in this, please involve an attorney in the contract.

  • April 23 2013
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The best place to start is looking for landlords who are willing to lease with an option to buy.  Sometimes Landlords will state this on their listing or add, but more often they will not.  You should always ask and perhaps a owner who never thought of this as a viable option may now consider it.  

Good luck and make sure when you are successful putting together a deal, that the documentation you use, protects you.  I would have a Professional assist you in order to ensure you are protected.
  • April 23 2013
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