The Wall Street Journal ( Jan 2016) earlier this year said that Rent to Own Homes are on the rise.
Want to find a rent to own house but aren’t sure how it works or if there is a “catch?” Read this article to discover what you need to know about local COS rent to own houses.
When you’re in the process of looking for a home, it is very tempting to respond to one of those ads in the local paper, or on Craigslist, or even one of those roadside signs, that are practically screaming the great deal of rent 2 own homes in Colorado Springs.
This option can be a win-win for both parties, but is it the best method to get into a great house?
It can be. Maybe you can’t qualify for a mortgage right now because of bad credit history, or you don’t have the money saved for a down payment. Rent to own can be a good option for you, as you can get into a house you love and work on restoring your financial stability at the same time, with the added sense of home ownership than if you rent a house the normal way.
However, even though this is a good way to achieve your goals, it is always recommended to ask these questions when meeting with a potential rent to own seller.
HERE’S A FEW IMPORTANT (SMART) QUESTIONS TO ASK A LOCAL COLORADOSPRINGS RENT TO OWN HOUSE SELLER
“What is the length of the option to buy the house?”
With a rent to own house agreement (http://en.wikipedia.org/wiki/rent-to-own#Real_estate) (also called lease option home), it’s usually two parts.
First, a normal rental agreement.
Second, the option to buy the house at a pre-determined price at a date in the future. Usually the timeframe for that is a minimum of 2 years. This gives you the time to weigh our options and also to see if your financial situation improves so that you can build up your credit score and save up for a downpayment. The longest option timeframe is usually the best as it gives you more time to get back on your feet financially in order to qualify for a mortgage.
“How much of my rent will be put toward my purchase price?”
Be very cautious about this. Recent federal laws have made providing “down payment credits” from your monthly rent very hard, if not illegal in some areas. Instead of applying a portion of your rent towards the purchase price, what generally occurs is that you will pay a non-refundable option fee which guarantees that you will be able to purchase the house at the agreed-upon price at the end of the rent to own agreement. The beauty of this is that you will not have inflated rent each month and if you decide not to buy the home, you know exactly what is non refundable.
“Who is responsible for repairs and damages on the property?”
This will depend on the agreement, so read it very carefully as it can vary greatly. Generally, you as the renter are responsible for general maintenance and upkeep…and for minor things (the first few hundred dollars in a repair). But if it’s a larger repair that wasn’t your fault, often the house seller/landlord is responsible for the repair after the first hundred or so. But, if you want to make upgrades or improvements that are important to you and your family you typically are allowed to do so at your own expense. Again, this varies with every seller. If you are working with us on looking for rent 2 own homes in Colorado Springs, we will walk you through how our rent to own program works and answer any of your questions anytime. But whoever you end up working with, be sure to have this clearly explained in your agreement so that all parties know who is responsible for what.
“If I’m not able to reach my goal after the option period, can I extend?”
For tenant buyers who work with us, we are usually very flexible in working with you to help us both reach the goal of your buying the house! As long as we can see that you are making a good effort, and the extension makes sense for both of us, we’d be happy to work with you. If your future seller is honest and fair, they will give you this consideration. However, it’s always in your best interests to do your homework and talk to the seller FIRST and ask them these types of questions before you sign on the dotted line.
“I don’t have the best credit score. What do I need to do to lock in this home?”
Again, any reputable Colorado Springs rent to own house firm like Swift Results will provide you with resources and connections to help you increase your credit score while you’re renting the home. This may include a referral to a reputable Colorado Springs mortgage broker….a credit counselor…or even their own internal guidance to guide you along this path. We know that may of the tenant buyers who work with us on getting into a Colorado Springs rent to own home have challenges to their credit. We will require a current credit report if you apply for one of our homes. We are OK with that and are experienced in working with that situation. But as always, we have to protect our investment as well, and we will only work with you if you show us that you are committed to paying your rent on time AND working to build up your credit so that you will be able to qualify for a mortgage when the option agreement expires.
Last, but definitely not least,
“May I take a copy of the rent to own agreement to my lawyer?”
The answer to this should always be, ABSOLUTELY YES! If you are working with a seller/landlord locally that tries to discourage you going to a lawyer, CPA, or a trusted advisor with this agreement before you sign, WALK AWAY. Nothing in the agreement should be hidden or misleading in any way. There are some very important elements in a rent to own agreement that you need to be clear on…and we will walk you through the agreement line by line before you sign, so that we are both fully on the same page and go into this arrangement with confidence and trust. So, be sure that you review the agreement carefully to make sure you understand it and how it works. Any reputable rent to own seller will help you understand the agreement and encourage you to run it by a trusted advisor of your own.
SO, WHAT’S NEXT? SEEING AVAILABLE RENT 2 OWN HOMES IN COLORADO SPRINGS
With these tips, you should be able to weed out the good sellers from the shady ones.
And remember, it’s always harder to find the good ones…the reputable ones…with REAL rent to own homes with a solid seller behind them. When you do find a great one, you won’t be sorry that you chose the rent 2 own route.
So your next step may be to dive in and see available rent to own homes in Colorado Springs, right?
If you haven’t started your search, START HERE? http://www.coloradospringsrenttoownhomes.com/
Simply fill out the short form on that page and start your search to see what rent to own homes we currently have available.
Our homes tend to go quickly, so be sure to get on our list and open the email alerts we’ll send from time to time when a new rent to own home becomes available.
GET ON OUR LOCAL COLORADO SPRINGS RENT TO OWN HOUSE LIST HERE>>> http://www.coloradospringsrenttoownhomes.com/property_type/homes-available-now/
Also, if you’d rather chat with someone about our program or about your situation, call us anytime at 719-548-4755, or email us through our Contact Page
We’re here for you and look forward to working with you.