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Rent to Own Yes or No

Is Rent to Own a scam? a good Idea? anyone know anything about it..I hate paying rent and living in an appartment and heard that a lot of people are getting out of appartments by getting into rent to own and take over the Loan and title after one year of paying (Rent) thus showing a good faith to lender.
Any advise or information would greatly be appreciated!

  • January 22 - Denton
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Answers (5)

I need a direct phone number to get hold of the account/membership department...
  • August 08
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I don't think I have ever seen a deal that was good for the buyer.
Much harder than what you have described.

I say never rent to own, lease to own, lease purchase or anything like that.

Do it right.....for most people that means a bank loan.
  • January 24
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Rent to own is one of the "late night TV" things that seems great when you've had a couple of beers.

The realities are not so pretty:

Plan on a non-refundable down payment of 5 to 30%.
Plan on the monthly rent being higher than market value rent, only the difference goes towards purchase.
Plan on losing all that money and getting kicked out if you can't get traditional financing at the agreed price and date.

So, as you are interested in home ownership, why not identify what is standing in your way?   Take actions on your credit, your savings or whatever else is an issue and then move forward.   It is much less risky.

  • January 22
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Profile picture for wetdawgs
Rent to own is one of the "late night TV" things that seems great when you've had a couple of beers.

The realities are not so pretty:

Plan on a non-refundable down payment of 5 to 30%.
Plan on the monthly rent being higher than market value rent, only the difference goes towards purchase.
Plan on losing all that money and getting kicked out if you can't get traditional financing at the agreed price and date.

So, as you are interested in home ownership, why not identify what is standing in your way?   Take actions on your credit, your savings or whatever else is an issue and then move forward.   It is much less risky.

  • January 22
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It can be good and bad depending on the seller and how the contract is structured.  Is there extra money set aside for each rent payment and how is the money used and refunded;  when and how does the title transfer to the buyer; and how do you the buyer know that the owner is paying the insurance, taxes, and any mortgage are some big questions.

There is a new program that has come into the DFW market area that helps with the questions above and it is called a Lease with Right To Buy. With this new investor the number of homes available for this type of purchase plan has just exploded giving you lots of options.

Basically you find the home, investor buys home, you rent home, and then you purchase the home from 1 to 3 years later when your credit is ready at a price agreed to up front.

Best of luck in your home search ... Bruce

  • January 22
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