There are numerous benefits of rent to own properties. This is especially true if you are a first-time homebuyer. Rent to own properties offer you many benefits over other real estate investment opportunities such as purchasing a home. Apart from the benefit of not having to go through all of the typical home buying procedures, rent to own properties also provide tenants with the security and peace of mind that comes with owning their own home. To discover these benefits of rent to own properties, read on.
One of the most obvious benefits of rent to own properties is the benefit of a fixed sale price. As mentioned earlier, the fixed price is a benefit for both the property owner and the potential renter. With fixed payments toward a future rental amount, a potential renter can have confidence that he or she will be able to afford the monthly payments. As the name implies, this type of arrangement works in just the same way as an exclusive rental agreement. Landlords can specify the amount of rental payment that will go toward the total rent for the property.
Another of the many benefits of rent to own agreements is the opportunity for homeowners to participate in home improvement projects. Many times, homeowners who elect to rent can take advantage of lower interest rates on projects such as improving their gardens and pools. In turn, these homeowners can use the funds from their rent toward their purchase price so that they can afford to make larger purchases in the future. If there are no significant improvements within a reasonable amount of time, homeowners may elect to foreclose on their property and begin looking for a new place to live.
Renting is also a great way to save money. In most cases, the less expensive alternative is renting rather than paying the full market value for a house. When a renter moves out, the landlord can move their things into a storage facility until they find a buyer. This is a terrific way to obtain extra storage space without having to renovate the entire residence. In addition, landlords can often do without paying market value fees for a few months while they wait to find a new renter.
The benefits of lease purchase agreements include the option to exercise a lease option, which allows the owner to purchase the property in question upon the expiry of the lease term. An individual can select either a standard lease with a one month option or a short-term lease option. In most cases, tenants choose the standard lease purchase agreement to ensure stability and long-term benefits.
Holders of leases often elect to pay a one time option fee. This option fee is applied when a tenant renews the lease at any point. The one time option fee takes the place of a monthly payment if a new tenant is signed on. This is done to cover the expenses associated with the establishment of a new business. This helps to keep the business viable while it is waiting for its potential tenant to become available.
The benefits of renting are not limited to the benefits of paying market rent. Landlords also have access to rental income during the vacancy period. If a rental unit is vacant for over six months, landlords may choose to rent the building to a qualified renter. In many cases, the landlord will require that the renter pay a one time option fee. This allows them to purchase the building at a discounted price while the property is vacant. The benefits of renting are still present even if a renter is unable to maintain payments and the property is left vacant for a longer period of time.
Renting or lease to own real estate has significant benefits to the property owner as well as the tenant. Both parties benefit with this type of arrangement. The benefits of rent to own are a way for the property owner to receive money from the rental sales of their properties, while the tenant receives money from their rental fees. The tenant is in control of their rental agreement.