One of the first questions we get from potential tenant buyers of our local Houston Texas rent to own homes / lease option homes is “how do rent to own homes work in Houston?”
With a flooded real estate market, especially since the bubble burst of the mid-2000’s, rent-to-own homes have become a popular option for people who are deciding whether to purchase or rent a home.
Renting to own offers advantages to both buyers and sellers.
For the seller, they have steady income to make steady mortgage payments, while the seller has a period, typically a year or two to organize his or her finances and secure financing to buy the house.
The Local Rent To Own House Process
Renting a home to own a house is a relatively straightforward process, though many people are confused.
A common misconception is that the renter can live in the home and pay rent over a period of 15, 20, or 30 years, then own the home. It’s slightly more complicated than that.
But here are the basic elements of a rent to own agreement.
• The buyer and seller draw up an agreement, covering all terms of a rent-to-own agreement.
• This contract will state the monthly rent, and a set period of time.
• The renter will have the option to purchase the home at an agreed upon price at the expiration of the agreed upon time period.
By giving a potential buyer a year or two to get their finances in order, the seller can continue to make mortgage payments on the home. This is beneficial to the buyer so as to give them ample time in acquiring their financing. In the meantime, they can usually begin customizing the home to meet their needs and preferences… essentially treating it like their own (because they may own it someday!) developing that sense of home ownership during the process.
How Does The Monthly Rent Work With A Houston Rent To Own House?
It really depends on the location of the house (there may be different laws dictating what one can do in different states) and new federal guidelines coming out that may limit what the property owner of the rent to own house could do.
But the standard guidelines of a rent to own house are pretty simple.
- You agree on a rental rate and a future purchase price upon the end of the rental lease sometime in the future (usually 1-2 years).
- You first pay an upfront payment to move in and secure the contract and the terms with the option to buy. The “option fee” or “move in amount” may in some case act as a percentage of the down payment on the home, should the renter decide to purchase at the end of the term. This may or may not be the case depending on when and where you’re reading the article (based on laws). Connect with us directly for the local Houston Texas Rent to Own laws.
- You pay the monthly rent payment. This is no different from paying rent in any normal rental situation.
- At the end of the rent to own agreement (usually 1 – 3 years) you decide if you want to purchase the home for the price you agreed on initially in your rent to own agreement. If you want to buy the home, great! We can assist you in getting qualified for a conventional loan to buy the home. If you don’t want to buy the home, no biggie. You’re not required to buy the home at the end of a rent to own agreement in Houston… the choice is fully yours.
So, for the question of “how do rent to own homes work in Houston?“… well that’s the basic process.
While there are lots of benefits on renting to own a home here locally… every housing option has pros and cons.
Just do your research, talk with reputable and experienced companies like Fast Cash Offers who can walk you through the local Houston rent to own house process… and make the smart financial decision for you and your family.
Many people choosing rent-to-own may have past credit problems, or may just be unsure if purchasing a home is right for them. If that’s you, looking into the rent to own process and is even interested in seeing the available rent to own / lease option houses here in Houston TX, click the link below and fill out your basic info to get on our Houston rent to own home list.
In an era of uncertainty in the real estate market, many Americans are finding that rent-to-own homes provide them the flexibility and the option of purchasing a home at the end of the term. By understanding how rent-to-own homes work, you can position yourself to take advantage of its many benefits and realize your American dream despite past credit problems.
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