As the owner of a Rent To Own company, this is an interesting subject. I chose to write about this topic because I am often asked why Rent To Own is bad, or some form of this question.
This is why:
You will pay more than buying a home through a traditional lender (bank). This is a fact, and it is not all bad! If you cannot qualify for a traditional mortgage, then Rent To Own may be the best option for you. In our program, you pay fair market value rent in addition to your option consideration. We then sell you the home of your choice for a price slightly higher than we paid for it. This is how we make money. I do not know anyone who wants to buy a house and sell it two or three years later for the same price. Would you do that? We will clearly outline what your future payments look like when we have fully assessed you - there are no surprises. If this sounds unreasonable, then you may think Rent To Own is bad. In this situation, Rent To Own may not be the best option for you.
You are unlikely to get a refund on your down payment if you change your mind. In our program, you pick the house, and we go over all the numbers with you ahead of time. We do not want to own or live in the house you choose! If you change your mind when you buy a house-the banks do not give you your money back. You can sell it, pay the bank back, and the remaining money is yours. Same with our program. The option consideration amount you give is credited towards the purchase of your home at the successful completion of the program. You must follow all the recommendations from Sprout Properties and our mortgage broker about the Rent To Own program, so that you can qualify for a mortgage at the end. If you change your mind about the house, no worries. You can purchase the home from us, and turn around and sell it at anytime. If you do not like to read that you are unlikely to get a full refund, then renting to own a home could be viewed as bad, or maybe not the right option for you.
Rent to own programs are different. Yes! Some are good, and some are bad. This depends on your perspective, and the way each company runs their business. Just like a restaurant, not all Rent To Own programs are the same. People will have different experiences with different companies. Do your research and go with your gut. If you listen to your inner voice, you will be able to decide if Rent To Own is a good option for you.
We promise to:
Get you into your home faster
Work hard to get you a great home
Provide you with all of the information required to prepare for a future mortgage qualification (we never know how the lending rules will change, but do everything we can to ensure that you are protected and prepared when the program is complete)
Provide win-win scenarios for all involved
We ask that our clients:
Follow all recommendations
Pay rent and option consideration on time each month
Communicate with us immediately if there are any problems, so we can help.
So why is Rent To Own bad? My opinion is that it is not bad - with the right company and the right people working together. I will leave it to you to decide your opinion.
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