This option has increased in popularity due to recent credit restrictions by housing lenders. It gives sellers a larger potential market and it gives buyers a larger available housing stock.
If a buyer does not have enough money for a down payment, or their credit isn’t quite where it should be, Rent to Own allows them to build equity over time. The buyers pay a certain amount each month to live in the house, and at the end of a set period — generally within three years — they have the option to buy the house. Each month of rent they pay is income for the seller, while a portion of it goes toward a down payment on eventually buying the home.
Rent to Own can be an attractive option for many individuals however not all Rent to Own contracts are created equal. NextStep can draft documents that protect both buyer and seller in a Rent to Own transaction.