In the United States, buying a house or your own property can be expensive. This the main reason why most American families prefer to rent a house first while saving for their own house in the future. Renting gives these families a venue to save more money and more time to look for a good house to buy.
Another option that families look into in owning their own houses is going for rent to own houses. Unlike the normal renting, renting to own gives tenants the option to buy the house they are currently renting after several years upon deciding to buy a house.
When one decides to venture on a rent to own house, this means that he or she must be willing and must agree in multi-year commitment of lease with plans of buying the house or the property. The set-up is that the renter should agree to rent for a certain number of years and upon completing the agreed number of lease, he or she will be given the option to buy the house if he or she wants to.
The good thing about this set up is that the tenant will not only have an option to buy the house in the future but also the tenant will have the chance to evaluate the value of the land or the house. If the value of the house or land mounts up after several years, then, the tenant will be more encouraged to buy the house. But if the value of the house or land tumbles then the tenant will have the option not to buy the property.
Before one gets into this kind of real estate arrangement, preparation is needed. A family needs not only to be prepared for the short term expenses but also for the long term. Paying for the monthly renting fee can be easy but once the years of lease have been completed and you can now have the option to buy the house, a certain amount has to be set aside. This amount will go for paying the remaining amount based on the original price of the house minus the years you have spent for the house lease.
It is best recommended that before buying a house, the tenant and the seller must have a written agreement stating the amount of rental payment which must be based on the original price value of the land or the house. The monthly payment will then be subtracted to the value price if the tenant decides to rent to own the house. In the contract, it must also be stated the number of years that the tenant must lease before she gets to buy the house, agreed upon by the tenant and the seller.
The end date which usually is after three to five years will depend on this agreement. Once the date of lease agreement has ended, then, the tenant can now buy the house. But if the tenant decides not to, the owner can have the option to end the contract and look for another prospective tenant buyer.