| Rent To Own Vs Rent |
 |
 |
 |
| Written by Shaun Rosenberg |
| Friday, 18 June 2010 15:25 |
|
A rent to own contract is an interesting way of renting out a house and it does have some pretty big advantages over the more traditional approach of just renting a property.
A rent to own contract is an interesting way of renting out a house and it does have some pretty big advantages over the more traditional approach of just renting a property. First for everyone that doesn't know what a rent to own contract is or how it works let's go over some of the basics. It is basically an agreement between a tenet and landlord which allows the renter to eventually buy the house at a given price at some point in the future. For example if the house is worth $100,000 now you might agree to sell it to the renter for $120,000 in 5 years. For this privilege you make some money up front and the renter pays you rent each month. When the 5 years comes up they can decide whether they would like to buy it from you or not. If they chose to buy it from you they will have to pay you $120,000 and you will have to give up the deed to the house. There are some pretty good advantages to doing this. 1. The Rent Money is More Secure Someone who rents to own a property cares about the agreement much more than a simple renter. As such they are more likely to keep paying then to stop all of a sudden and risk breaking the contract. If a renter is kicked out they just got a couple months of free room and board. If a rent to owner is kicked out they just lost a house. 3. Take Good Care Of It One other advantage is that a rent to owner will actually keep the house in good condition. Someone who rents a property will not care about a property as someone who sees it as their house and is working to pay it down. 3. Tons of Demand There is also a lot of demand when it comes to rent to own contracts. More demand means you will be able to fill it faster and it also means that you will be able to charge more money each month, which is also a bonus. Entering into a rent to own contract can be a great alternative to renting a property. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. For more on the rent to own agreement or for more on real estate visit Shaun's beginning real estate investing page. Get a totally unique version of this article from our article submission service |