Some Unique Advantages of Renting to Own Property Today
Owning a piece of property can either be easy or hard depending on a person’s circumstances. Many people are of the opinion that there are only two ways to buy property. Either via paying cash or through a mortgage. However, there is a unique third option which has been around for many years and which provides both buyers and sellers perfect opportunities to settle property ownership deals.
In contemporary property transactions, ownership changes over immediately or within a few days. In the rent to own transaction, the renter or buyer pays rent and a small premium over time and then finally pays the remaining balance of the property price. Initially, the buyer will pay some premium which will serve as a lock to the property price. The buyer, just as the seller, stands to enjoy a number of benefits which are hard to come by in the other forms of property exchange transactions. These benefits are discussed below:
To the renter or buyer
- The renter retains the control of the property for the period that the contract is in force or at least until any party to the contract breaches it. This means that the renter will have the right to improve on the property and treat it as their own. They will perform the basic home improvement tasks including painting and renovations.
- The property’s price is locked. This means that the buyer and the seller will agree on a specific price for the property. Even when the neighboring property market appreciates, this will remain at the set price. This helps to protect the buyer from being manipulated by the seller. However, at the onset of this contract, the price set will be usually higher than its value currently; otherwise, the seller will have no motivation to sell it.
- In most cases, the people who use the rent buy option are those with poor credit ratings or those who cannot access bank loans. This option makes it possible for them to begin the process of owning a property as they streamline their financial affairs. Moreover, the approval period of this transaction is far shorter than the mortgage approval.
To the landlord or seller
- In the contemporary market, a seller of the property is only able to access a small number of potential buyers, hence making the selling process slow and at times uncompetitive. With the access of the rent-to-buy group, a seller has a new category of buyers who will make their property fetch a better price.
- This is another way through which a person can earn income using their property. A property owner could be in need of cash to buy some other property while at the same time not in a hurry to sell off their current one. They can use the initial down payment premium paid by the renter or buyer in the meantime.
- The rented property which the landlord is selling will remain in immaculate condition because the tenant will keep it so. The renter is looking forward to honoring the deal and hence will make every effort to keep it clean.
So for both,the renter and the seller, to rent property turns out to be a good move financially.