When most people think about their living arrangements, they believe they have two options to consider: renting or buying. In reality, that’s not the case. There’s a third option: renting with the intention to eventually own. Rent-to-own homes are becoming increasingly popular, especially in big cities and expensive metroplexes.
If you’re interested in the idea of buying a home but aren’t quite ready to commit to a house completely, here’s why investing in a rent-to-own property might be the way to go.
You Don’t Have to Immediately Take Out a Loan
Ready to buy a home, but not completely ready to apply for a loan? Renting-to-own a house might be an easy solution. You can begin the process of working to purchase your dream home, but you won’t have to head to the bank for that intimidating mortgage just yet.
Your Credit Score Doesn’t Have to Be Great
Many people are unable to consider living in a house because they don’t have the necessary credit score to apply for a mortgage. With rent-to-own homes, that’s usually not a problem. You can begin renting the house with a low score, then use your time as a renter to improve it. Once you score is high enough, you can take out a loan with a solid interest rate and finally go through with the purchase.
You Can Give the Building and Neighborhood a “Trial Run”
Often, you think you want to buy a home somewhere, but then circumstances change. You get a new job in another location or decide you don’t like the city as much as you thought you did. When you purchase a house, deciding to up and move soon after the contract is signed is tricky, but when you rent a house and only plan to buy it, you have more flexibility.
You Will Slowly Start to Save for a Downpayment
Forget waiting to look at houses until you have a downpayment saved up, which can take years. When you find a house to rent and eventually own, your monthly payments will most likely contribute to a downpayment fund that can someday be used to purchase the house. Therefore, you’re saving and renting at the same time, which makes life easier on multiple fronts.