Rent-to-own agreements if properly crafted are very effective in enabling people to buy a home without any problem of financing or paying for down payments. If you are considering rent-to-own and heard only the good side of the story then carefully evaluate the cons of the process before you make any decision. You can’t just leap to the cliff without looking down. Never compromise your ‘yes’ especially if there are some terms and conditions that you don’t understand or agree with. To strengthen your decision whether to buy or not to buy, here are the disadvantages of RTO:
Higher Cost – A house that would have been purchased at $300,000 could have a price of $340,000 after a one-year-rent-to-own agreement and even higher at the end of a two-year agreement.
Higher Payments – The monthly rent you pay under a rent-to-own agreement is higher than the rent you pay under a normal rent agreement. The main reason for the higher rent is the fact that you are both paying for the space and for the ‘option to buy’ the property at the end of the set lease period.
Possible Eviction – An eviction may occur even when a single payment is missed. In short, the seller will forfeit the money intended for down payment because of a single missed payment.
Cancellation of the Contract – RTO agreements don’t have the option for an event where the property is transferred to a third party, or if the seller meets an accident or death. Although insurance can cover payments in case something bad happens to the renter, but the seller may be justified in terminating the RTO agreement without having to refund the renter’s money.
The rent-to-own agreement is a wonderful option for families who are having a hard time applying for a mortgage loan in order to purchase their own house, but at the same time it is also risky. If you think you are not yet ready, think carefully if you can adhere to the terms. Most individuals dreamed of owning a Mesa Arizona Real Estate property, but in some reasons cannot give up renting yet. Good news! Rent to own with its lease-option-contract can make your dream of buying a home possible. Simply visit Real Estate Potomac Maryland for buying advantages.