Rent to Own is a creative real estate solution allowing tenants to purchase a rental property with a fixed term and usually fixed price. While renting your place it also gives you an option to purchase property with or without a down payment. If you don’t have down payment aside, the setup helps you benefit a rental credit towards your down payment. Although it’s not directly asked, credit and payment history is important to determine minimum required payments and setup of the agreed terms.
Rent to Own is a winner deal for every party involved. It helps investors (or landlords) to make money even in a downward economy as well as tenants with bad credit who cannot qualify for a mortgage. One of the biggest advantage for tenant is to accumulate savings with rental credit compare to only renting. That way moving every year will be postponed until the minimum required down payment saved and credit is recovered.
There could be some cases with Rent to Own where people considered illegal. Or some cases end up in courts. This situation occurs when parties avoid legal fees and consultation to attorneys. Hence, most of the time lack of communication or trying to save couple hundreds are the main reasons of these conflicts. It’s utterly crucial to consult someone knows these types of deals and setups. After all, your commitment is not on bunch of groceries, rather, a thousands of dollars deal which can settle you to a new home.
Unlike a regular real estate purchase there are some due diligence you must do. You should find a good lawyer who understands alternative real estate transactions, and ask many questions about their experience in this field. Most of them will tell you that they have experience, but some of them really have. Don’t be afraid to ask for references. Talk to them directly and ask their experience with the lawyer.
Try to collect information about the property. Ask the neighbors, they will tell you what happen in the past. Whether there was a bad tenant inside, or roof went down or any suspected activities happened in the past. Try to understand the motivation of seller. Write your offer. Never, ever give a deposit check to the seller. Submit your paperwork to your lawyer.When writing offer, don’t forget to add at least one condition like “Subject to Buyer’s Lawyer’s Approval” or “Subject to Satisfactory Home Inspection”. These conditions will help you to back-up at any unexpected situation.Last but not least, if you are not using a lawyer, check the title of the property. Many registration offices in Canada offer this service for $5-$10.
If you perform all the steps above you would be secured in the deal. Hence for a bad credit or no down payment person the deal should be a solution for you, not a problem. Trust alternative financing with confidence.
Want to find out more about Rent To Own Houses in Calgary, then visit my site on how to find an Owner Financed Property in Calgary .
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