Enter a lease option agreement instead of a hire purchase agreement. As a Rent-to-Own agreement is a kind of combination between a rental agreement and a real estate purchase agreement, there are many details to include. Make sure that all the details below are included in the drafting of your agreement. Finally, when meeting your potential tenant/buyer, you should think about where they are in their lives. Statistics show, for example, that future families are more likely to settle in their current environment for a long time. (That`s how pet owners are. If you know these facts about a potential buyer, it can determine the plausibility they will experience with the purchase of the home. In rental agreements, the rent is usually much higher than in the regular establishment. This is due to the fact that the percentage of the monthly rent will usually be recorded in the trust account. Find an overview of your local housing market with current property prices. If you`re looking for your destination city or neighborhood in Trulia, you`ll find some hints about current local prices that can help you decide when you want to buy a home: In addition to what`s described above, you should also be sure to research your local and government laws on what should be included in a rental agreement. Some states require specific changes to disclosure and inspections before signing a lease-to-own agreement.
If this is the case, you should put it into effect. Once the agreed rental period has ended, the tenant is faced with two possibilities. They can go to a bank and tout both their better credit rating (since they have continuously paid rent over the past 1 or 3 years) and their increased equity in the house they want to buy. At that time, the bank can offer them a mortgage that will allow them to buy the house. The other option is simple: the potential buyer can refuse to buy the house and the seller can start the process again. If your tenant is working to improve their rating to a point where they can qualify for a mortgage, you may also wonder if they have taken steps to improve their creditworthiness outside of paying the normal rent to you…