Rent-to-own programs have become increasingly popular in recent years as an alternative to traditional renting or buying. Under a rent-to-own agreement, you typically sign a one- or two-year lease with the option to purchase the home at any time during or after the lease term. These types of agreements can be beneficial for both renters and landlords. Here are some of the benefits of rent-to-own programs:
One of the biggest benefits of a rent-to-own agreement is the added flexibility it provides.
With a traditional rental, you are locked into a one- or two-year lease with no way to get out early unless you are willing to forfeit your deposit.
With a rent-to-own agreement, however, you have the option to purchase the home at any time during the lease term, giving you added flexibility in case your plans change.
Another benefit of rent-to-own agreements is that they provide an opportunity to build equity in a home.
While you will still be required to pay rent each month, a portion of that rent will go towards the eventual purchase price of the home.
This allows you to start building equity even before you officially become a homeowner.
If you plan on buying a home in the near future, signing a rent-to-own agreement can actually help boost your credit score. This is because your rental payments will be reported to the credit bureaus just like any other type of loan payment, and on-time payments can help improve your credit score.
Rent-to own agreements can be beneficial for both renters and landlords. If you are considering signing a rent-to-own agreement, be sure to weigh all of the pros and cons carefully before making a decision.