People confuse the term of rent-to-own homes with renting property. There is a slight difference between both of these terms. When someone means renting a home, then it means that they would sign a contract for it and lease the property until their contracts end. However, this is not the case with rent-to-own homes. In this, you have to sign a contract which has a certain time duration on it. After that duration ends, you have to buy that property you had been leasing. It is basically a deal between the owner and the renter.
Rent-to-own home gives two options to its customers:
When you go for rent-to-own homes, then it entirely does not mean that you most certainly have to buy the property after the lease has ended. There are two options which you get offered. One is that you tell the contractor before signing the contract that you will only be renting the property, and you have no plans on leasing it. The second option which you get is that you can lease the property for a certain amount of time, and after that, you can buy it from the owner before the lease expires.
For rent-to-own properties, you have to be extra-precautious:
Buying a property is not like leasing one, and for it, extra precautions need to be taken. For instance, buying a home is an investment that people save for all of their lives. For ensuring that you are investing your money in the right place, it is important that you do proper research on the owner to know whether you are getting a good deal or you need to check further in the market. There are certain precautionary steps that you need to make your investment worth it. A list of these precautions include:
- Taking inspection of the original title deeds
- Doing research on the land records and records of the sub-registrar
- Taking search of the records of the society
- And getting to know the permitted use and restrictions
Rent-to-own homes have non-refundable upfront fees:
When you go for the option of renting to own homes, then the buyer has to pay a non-refundable fee. It is usually a one-time fee and is called option fee, option money, or option consideration. The reason why it is called option money is that it gives users the option of buying a house on the same date shortly. The fees are typically negotiable, but at the same time, this varies from renter to renter as there is no standard rate for it. And another thing which we would like to add is that the fee ranges between 1% and 5% of the purchase price.
You would have to take care of the rented property by yourself:
Many people don’t know this, but when you rent a property, it means that you have to take care of its repair and maintenance by yourself. In some contracts, the landlord takes this responsibility; however, in some cases, it is the obligation of the renter. So, you would have to carefully read the contract for this clause before you actually sign it. However, certain things like mowing the lawn, raking the leaves, cleaning out the gutter, getting the damaged roof replaced, you would have to get done by yourself. If you are planning to rent-to-own properties, we suggest that you go through the website of Stop Renting Albany.
We are now moving onto the section of some of the most commonly asked questions about rent-to-own homes.
Commonly Asked Questions:
Q1: What are the things to consider before buying a house?
House is a big investment therefore before buying it, and you need to do proper research on it. You must research the soil quality, topography on the land on which the house is constructed, and whether the person who you are buying from is either reliable or not. Before checking a house, the title deed must be verified and checked in detail.
Q2: What documents should you look for when buying a house?
There are some documents which you should look for when buying a house. For instance, if you are buying a house in commercial property, then the original sale deed and the society share of the certificate are some of the crucial documents which you should take into consideration. The home buyer should also check if the property has sanctioned a building plan from the local authority.
Q3: Do you have to pay a deposit for a rent-to-own home?
Yes, in most cases, you do have to pay an upfront fee, and in most cases, that fee is non-refundable. However, that also depends upon the renter to renter. As sometimes, you don’t have to pay anything at all whereas in some cases you have to pay 2-months fees.
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