WI Rent to Own - An Introduction to the Rent to Own Method

Buying a house is one of the biggest steps to take when you’re building a family. At the same time it is also important because having your own house is one of the best things to invest on with your family and for your children’s future. Unfortunately, the best houses aren’t all that cheap – in fact, there’s not a good family house in the market anymore that you can call cheap, especially if you’re highly concerned about the house’s location. 

To make up for this known problem, a solution has been provided by real estate dealers – the “rent to own” method wherein the house is “rented” until the full amount has been paid. Now usually, when you buy a house a downpayment is also made, but because of the decline in the economy, the rent to own method is preferred over a full payment purchase or buying via downpayment. 

The rent to own process, also known as RTO or lease to own, is similar to that of a car’s lease. The renter and seller of the house have to negotiate their terms and seal the deal with a written contract for future references. In the contract, the renter will be required to pay monthly rents to the seller which will eventually be included in the total amount of the house’s negotiated amount. The terms of contract vary by negotiations and may have limited time or years (usually 3 – 4 years) wherein the renter will have to complete the full sale’s payment to the seller and by then, the house will be completely sold. The contract can also include terms on other features such as appliances, maintenance and house repairs according to the negotiations made by the involved parties. 

This method benefits both the seller and the renter as the renter will not have to spend as much on a downpayment and can acquire the house at the start of the rent to own period, thus, they won’t have to wait for many years to pay for the house in full before they can move in. For the seller, they won’t have to wait for someone who will agree to pay in full or by downpayments especially when the market has gone down. Before you agree on a contract or close a negotiation, always make sure you’re dealing with the right people and have a lawyer check the contract for complete understanding.