Real Estate Investment Firms Dive Into the Rent-To-Own Game
Most prospective buyers considering rent-to-own contracts imagine a traditional arrangement with an individual seller – a private homeowner selling their property through a rent-to-own agreement. However, in recent years, the market has seen a proliferation of institutions – real estate investment firms, typically – offering rent-to-own options, as well. Buyers should know there are marked differences in renting-to-own from an institution versus from an individual, and many of these differences actually benefit the buyer.
Private sellers tend to offer rent-to-own contracts with three-year lease periods, but institutions usually offer two-year contracts that can be extended for up to an additional four years. This offers extra flexibility for a buyer who may need more time to save up for a down payment or to repair their credit in order to qualify for a mortgage loan.
Additionally, since institutional rent-to-own companies tend to be publicly traded, they are subject to a host of consumer protection regulations. This means contract terms are made clear up-front for the buyer, and they often contain built-in protections that may not be found in private rent-to-own arrangements.
Finally, institutions are also likely to maintain consumer help resources for buyers. Those in need of credit counseling may be able to access this much-needed financial lifeboat to help prepare their finances for the demands of future homeownership.
Of course, many buyers benefit from rent-to-own relationships with individual homeowners, too. Always consider the options before purchasing a home, and choose the one that best suits your individual situation.
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