Rent With Option To Buy Or Rent To Own

Dated: 10/22/2014

Views: 638

Rent With Option To Buy Or Rent To Own Homes in Maryland.

Many callers this year have been asking us whether or not a property we've listed will consider a rent to own buyer, and unfortunately we usually have to turn them away. Out of the thousands of homes available on the MLS throughout Maryland and DC, there are actually only about 22 properties available as Rent- to-Own

Rent-to-Own homes tend to be hard to find in general, and are hard, complicated deals to put together. Many people are so caught up in the desire to "Own" a property that they want to consider this option as a path towards ownership, but I've learned in my time structuring deals just like this and seeing the in and outs and pitfalls, that they are generally unattractive deals to both buyers and sellers.
For wannabe buyers, these rent to own homes are typically outdated and overpriced. The reason most owners would want to sell this way is because they haven't been able to sell to the general market and wants to find a person who would be willing to pay a premium to get a home. The owners of a rent-to-own property will also usually charge a higher deposit to secure an ownership option, and that deposit is usually not refundable at all if you fail to secure financing later on. The rent that you pay will usually also be higher than market rents, and that money typically goes toward reducing your principal, yet that principle is usually always higher than market price for the house.
The final pitfall is you usually will not get the same protections as a tenant of the property as you would as the deeded owner. You may be evicted much sooner than you can be foreclosed on, and an owner can usually keep all the money they've collected from you, and then re rent the property quickly.
So even though this type of transaction sounds good to the aspiring homeowners, it is wrought with pitfalls that generally make it not worth it to pursue. The amount of money it costs and risks you take to purchase a home this way could be better applied to repairing your credit and would get you into a real purchase sooner than being able to purchase the rental.

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