Important Things You Should (But Don’t) Know About Rent-to-Own Agreements
Are you considering signing a rent-to-own agreement? If so, you should know the ins and outs of this agreement and what it entails to make sure this will be the best housing agreement for you.
To learn more about a real estate rent-to-own agreement, keep reading. In this guide, we will let you in on some of the basics of this contract type so that you can make sure it’s the right option for you.
Rent to Own Agreement: An Overview
A rent-to-own agreement also referred to as a lease-to-own agreement, is a common rental agreement that allows tenants to buy a rental home. While this agreement type is more typical for properties with a single-family home, they are also available for condos, apartments, and duplexes. This agreement type can have many benefits for both tenants, and renters who hope to become homeowners.
This agreement type will likely come with two different forms, a lease agreement and an additional form that will outline the purchase option. This may all be compiled into one document that you turn in at once, or it may be two different documents that you are filing at separate times.
With a rent-to-own agreement, the original owner will act as landlord until the renter requests to purchase the property. The rental agreement component of the contract will be very similar to a traditional renters agreement, meaning it will include information such as the required monthly rental rate, the lease period, and the maintenance and repair responsibilities of both the tenant and the landlord.
It’s important to note that in a rent-to-own agreement, the tenant will often be responsible for all maintenance and repairs, as they are doing so to make investments towards a property that they intend to own.
The additional document will outline information such as the timeline in which the tenant can request to purchase the property, or may have a deadline in which the tenant will have to purchase the property which will be put in place by the landlord.
Often, the rent will be increased to pay towards the eventual purchase of the home. If the tenant chooses not to purchase the property by the determined deadline date, the landlord will not be required to return any additional fees that were outlined in the rent-to-own agreement. Because there is much at state for both the tenant and the landlord, it’s important to make sure that this document is well crafted and that both parties are sure about the decision before signing.
For more advice on rent-to-own real estate properties, check out this article.
Find Out if Rent to Own is Right for You
If you’re currently househunting, it may be worth your time to consider whether or not a rent-to-own agreement would be a good option for you. Use this guide to help you make the best homeowning decision.
For more advice for homeowners, tenants, and renters, head to the “Life and Household” section of our site today.