South Bend Property Investment Tip for homebuyers via Rent To Own

Chapter 7: Key Tips for South Bend Homebuyers and Property Investors

First, if you are an investor considering rent-to-own as an investment

Rent to own homes provide a great choice for buyers who have problem credit or difficulty qualifying for a home mortgage. In essence, rent to own homes allow many homebuyers to achieve the dream of home ownership, even if they cannot afford something as fundamental as a down payment.

However, before entering into a lease to own agreement, those considering lease option homes should become familiar with what they can expect after signing the contract. The following is a look at some important information that prospective buyers should know about rent to own homes.

Rent-To-Own Homes Make Moving In Easy

One of the reasons for the popularity of rent to own homes is the ease with which homebuyers move into them. Rent to own homes allow renters move into homes without any dealing with banks or the mortgage companies. Little paperwork is required, which also makes it faster for homebuyers to move into the home of choice.  Finally, many lease option agreements may not require a credit check or come with minimal credit requirements, making it easy to complete the contract and move right into the home of their dreams.

Home Sweet Home

Rent to own homes allow homebuyers to quickly make the property feel like home, which is quite different from a situation where an individual only rents the residence. In most traditional rental situations, the tenant normally needs to get any changes or improvements approved by the landlord before taking care of them. This is not the case with lease option homes, which is another reason they are so beneficial.

Most of the rent to own homes contracts allow the prospective buyer to make changes to the home and property, which includes renovating, painting and even landscaping it the way that is desired. This allows homebuyers to make the property feel like their own home. However, homebuyers must remember that money they spend on repairs or changes to the property will not be given back to them if they decide not to purchase the home at the lend of the lease period.

Credit Repair is Essential

Some homebuyers who enter into rent to own homes contracts will never end up purchasing the homes by the end of their contract. Those with credit problems need to take measures to improve their credit during the lease period if they want to qualify for financing for the home. Individuals can work on improving their credit on their own or they may want to use the services of a credit specialist. Failing to repair credit during the lease period may mean that homebuyers are still unable to make the final purchase in the end, which means they have spent money on the lease option fee, rent and improvements in vain.

Researching the Price is Key

Homebuyers must be aware that the prices on rent to own homes are often higher than homes sold traditionally. However, homebuyers still need to spend some time researching the price the seller is asking to ensure it is a reasonable price. This research includes checking out comparable homes in the area to see what they have been selling for, which helps homebuyers decide if the asking price is really a good deal.

Having the home assessed for value can help as well, since it gives prospective buyers an idea of what the home is currently worth before negotiating a purchase price. While paying a bit more for the benefits of lease option homes is to be expected, homebuyers should avoid overpaying too much on a home that may not increase in value over time.

Locking in a good price now can be beneficial to homebuyers, so doing a bit of research is important to ensure the seller is not charging an unreasonable price for the home being considered.

At a Glance:

  • Rent to own homes are favorable to people with bad credit scores;
  • Rent to own homes are relatively easy to move into;
  • The contracts of most rent to own homes are structured in such a way that the renter can actually start to improve the inside and the outside of the home as if it were already owned by him or her;
  • Chances for eventually buying the home can be increased by repairing credit;
  • Eventual buyers should ensure that the purchase price corresponds to the real value of the home.
Where to find Michiana Investment Property via Rent to Own

Chapter 6: Where to Find South Bend Rent to Own Homes

For homebuyers that decide to go the route of rent to own homes, finding these homes may seem difficult. Not only do homebuyers want to find a nice home, but a good landlord that offers agreeable terms. When traditional home financing is limited or restricted, homebuyers usually find it easier to find lease options. Rent to own homes are also common in a buyer’s market, but homebuyers still need to know where they can find these homes. Here is a look at some of the best places where these nontraditional homes can be found. 

Web Search

Homebuyers should make use of search engines, such as Google, when searching for rent to own homes. Using the search term “rent to own homes” or “lease option homes” along with the city and state of interest may provide excellent results. For example, a homebuyer who wants to buy in Houston, Texas should use search phrases like “lease option homes in Houston Texas” or “Houston Texas rent to own homes.” This will provide homebuyers will local results that may prove helpful when searching for these non-traditional home options.

Newspapers

Newspapers have fallen in popularity in age of the Internet in the 21st century, but in many cases, homebuyers may find rent to own homes in newspapers. The real estate classifieds section is the best place for potential homebuyers to search. Sometimes, sellers who are not comfortable with using the Internet will resort to the newspaper to advertise rent to own homes. Even though newspapers may seem “old school,” it never hurts to check, since they may offer some excellent lease option opportunities.

Driving through Neighborhoods

Consider driving through neighborhoods of interest when trying to find rent to own homes. Often, lease to own homes are scattered through different areas. Simply driving around and scouring neighborhoods to check for rental signs may provide an excellent way to find rent to own properties. Many sellers choose to use signage to advertise their home instead of using other costly advertising options, so it pays to drive through areas of interest.

Realtors

One of the last resorts for homebuyers seeking rent to own homes is getting in touch with a real estate agent who deals with rentals. These real estate agents often know about lease option homes in the area.  Quality agents have their finger on the pulse of the market, thereby making the search for a lease option property just a little bit easier.

At a Glance

  • John Tiffany and South Bend Invest can help;
  • Searching with a search engine may provide excellent local results;
  • Newspapers are also a great place in which to find ads for some rent to own homes;
  • Driving through local neighborhoods may yield potential lease option properties;
  • Lastly, getting in touch with an Integra Real Estate of Michiana realtor who can help.
South Bend Budgeting Rent To Own

Chapter 5: Figuring out a Budget for South Bend Rent to Own Homes

Budgeting is exceptionally important in all areas of finance, and this holds true when purchasing rent to own homes. In fact, effective budgeting can mean the difference between succeeding and failing when making this kind of an offer on a home. The following steps offer helpful insight to help homebuyers figure out a budget when deciding to purchase a lease option home.

 

Step 1: How Big a Home?

Buyers ought to evaluate just how much home they can actually afford. They will likely have to qualify for a mortgage when it comes time to purchase the home. Based on FHA guidelines, the residence they purchase must not exceed 29 percent of their earnings. Other things to consider are private mortgage insurance, homeowner’s insurance, basic rent payments and even homeowner’s association fees.

Step 2: Understanding the Market

Homebuyers need to investigate present-day rent to own homes in their local areas. Flyers, websites, real estate agents and even property management firms could help them discover rent to own homes that they can afford. RealtyStore.com offers helpful search engines for homebuyers looking for lease option homes in their area, allowing buyers to search by state, county, city and more. While looking at properties, prospective buyers should ask to have the utilities turned on so that they can see potential problems with the property.

Step 3: Review the Contract

Buyers must also get detailed information about the rent to own homes contract that they will be entering into. Learning more is important, since the contract may be established in several different ways.

  1. First, the seller may require a down payment from prospective buyers at the start of the contract.
  2. Second, the seller could also charge renters a fixed, monthly amount over the specific rental amount. If the seller does charge a renter extra, this amount is set aside so the renter can use it towards the down payment on the home when they make the final purchase. Finally, the seller could use both the down payment and the extra rental amount within a lease option contract.

Step 4: Considering the Risks

Comprehending the risk that comes with lease option homes is also part of the budgeting picture. If the deal falls through, the renter loses all the money put into the home. For instance, the seller could end up having to file bankruptcy or could sell the home to someone else. A seller could lose ownership of the residence by way of a foreclosure, or takes out a 2nd mortgage on the residence. In any of these situations, the homebuyer may not be able to purchase the home, which means their investment in that home could be lost.

Step 5: Inspecting the Property

A potential homebuyer must check the home he wants to rent for an eventual purchase very carefully. Obtaining an inspection of the residence via a 3rd party inspector is an excellent idea. For example, potential homebuyers should look out for peeling exterior paint, extensive roof or water damage, or drainage problems on the outside of the property. Inside the home, buyers should look for badly patched walls, cracks, damage from water and mold and pest problems.

Step 6: Timeframes and Fees

The renter must also inspect the contract and read the fine print before deciding on a budget and making the investment in the home. Buyers need to determine when the property title will be given to the renter. Every timeframe and every fee should be checked carefully as well.

Step 7: Paying the Funds

Finally, the prospective homebuyer should pay off any necessary funds at the signing. Usually, this will include the 1st month of rent and the initial down payment. Some sellers may just insist on certified funds, but after successful payment, the prospective homebuyer ought to receive the keys to the house.

At a Glance:

  • Buyers should evaluate how much home they can actually afford;
  • Prospective homebuyers should consider all rent to own homes options in their area;
  • Buyers must obtain detailed information on the contract into which they are entering;
  • Be familiar with the risk involved with rent to own homes;
  • Prospective buyers should inspect the inside and outside of their property;
  • Inspecting the contract is important;
  • Buyers should pay off due funds at the time of signing

Next: Where to find rent-to-own homes

South Bend Rent To Own Investment Property John Tiffany

Chapter 9: Not Everyone Likes Rent to Own Homes

Many prospective homebuyers find rent to own homes to be an excellent option that fits their unique financial and home ownership needs. Those who need time to improve their credit can benefit from lease option properties. Individuals having a tough time qualifying for a mortgage also make great candidates for lease to own homes. Of course, rent to own properties may not be for every potential buyer. Take a careful look at instances where renting to own may not be the best solution for a homebuyer’s needs.

Discipline

Homebuyers must have discipline to make a rent to own property work out. For instance, if a homebuyer does not have good credit, then they must work hard to fix the bad credit in order to qualify for the financing needed to buy the home at the end of the lease period. Those who need some time to save up for a down payment must be disciplined enough to work hard to save the down payment money before the end of the lease period so they can make the final home purchase.

Some individuals have bad money habits that have led to financial downfall and without discipline, this home buying option will never work. Homebuyers who do not feel they are discipline enough to make the changes needed to go this route should consider another option when they are ready to purchase a home.

Mortgage Readiness

When entering into rent to own contract, buyers need to prepare to qualify for a mortgage, which will probably be needed to finance the final home purchase. Various things will need to be done to make sure the buyer is ready to take out a mortgage. Buyers need to work on paying the monthly rent amount on time and should also ensure that all other bills are paid on time as well.

Those without credit will need to work to establish good credit in preparation for mortgage qualification. Potential buyers with credit problems will need to take steps to fix those problems before they are ready to apply for a mortgage loan. Individuals unwilling to prepare to take out a mortgage should be ready to make financial changes and take action to ensure they qualify for the needed financing.

Indecision

Rent to own homes require commitment on the part of the homebuyer.  The goal of homebuyers is to eventually be able to purchase the home of their dreams. This means that homebuyers must stick with the home until the end of their contract or they will encounter certain consequences.

If potential buyers are experiencing any indecision before entering a lease option contract, it is best to avoid making the commitment until they are ready. Walking away from a contract will result in losing the lease option fee as well as the rent paid, so this option works best for those who are sure they want the home before making the commitment. Those who may have to move in the near future or those who may face frequent job changes should probably rethink this home buying option. Some are also worried about scams.

Steady Income

Making the financial commitment to purchase a home requires a steady income, no matter the exact method of purchase chosen. To afford rent payments and future down payments, prospective buyers must insure they have a steady income coming in before signing a lease option contract.

Not only is a steady income important when paying the lease payments on rent to own homes, but when applying for financing at the end of the lease period, homebuyers will be required to show lenders proof of steady income. Most lenders require applicants to show steady income for at least the past two years.

At a Glance

  • Those without financial discipline may want to reconsider before choose a lease option home;
  • Rent to own homes are not for people who are not committed to preparing to qualify for an eventual mortgage loan;
  • Homebuyers should avoid signing a contract if they are indecisive about the home;
  • Rent to own homes are not for buyers who may move in the near future;
  • A steady income is essential for those who want to pursue lease option homes.

Chapter 4: Rent to Own Homes Frequently Asked Questions

Although rent to own homes have been available for some time, many people are still unfamiliar with this non-traditional buying option. Many potential homebuyers find themselves asking questions about the lease option process and some of the important terms surrounding it. Buyers can refer to these Frequently Asked Questions and their answers when going through the process of signing a contract on a rent to own home. Keep these helpful answers handy as a guide to this popular home buying process.

Q. How do rent to own homes work?

A. Rent to own homes allow homebuyers to lease a home while reserving the option to buy the home at any time either during the period of the lease or the end of the lease. During this stretch of time, the homeowner’s hands are tied and they are not permitted to advertise the residence as for sale after entering an agreement to sell it to the prospective buyer.

There are two sections to a rent to own agreement. The first section establishes what the monthly rental payment will be. The second section of the rental agreement establishes that the homeowner is bound to sell the residence to the prospective purchaser at a predetermined price.

Q. What is the option fee?

A. An option fee is often confused with a rental security deposit, although they are not the same. This fee is paid up front at the start of the lease. In most cases, the option fee is not refundable at all, something that potential homebuyers should keep in mind.  Whether or not the prospective homebuyer decides to go ahead and buy the residence in question, the seller will still keep the fee. In some specific kinds of rent to own homes agreements, this particular option fee is applied to the buying cost of the home.

Q. How much will the option fee cost?

A. The option fee is an integral part of lease to own agreements. According to the SF Gate website, a usual option fee falls between three and five percent of the agreed upon buying price. Of course, this is just an average figure, so it can vary, depending on each unique situation. The good thing about rent to own homes is that the parties involved may negotiate the amount of the. Usually, sellers are attracted to homebuyers that can put down more money on the home.

Furthermore, the more cash that homebuyers contribute as part of the option fee, the less they will need to finance elsewhere when the lease expires and they are ready to purchase the home.

Q. What is monthly rental credit?

A. Many rent to own agreements feature a provision that sets aside a fraction of the monthly rental payments as credit toward the purchase price of the residence. This amount varies from situation to situation, yet it may be as great as up to 50 percent of the rental payment. This provides homebuyers with the benefit of creating equity while renting.

Q: Which Party pays for the homeowner insurance and the real estate taxes on the rent to own residence?

A: The party paying for both the homeowner insurance and the real estate taxes on the rent to own home is usually the seller of the property. Of course, once the homebuyer makes the purchase and takes possession of the home, the taxes and insurance costs will then be their responsibility.

Q: What should consider rent to own homes?

A: Many individuals find rent to own homes an attractive option. Previous sales have shown that the following people often consider lease option properties:

  • Homebuyers who like to invest in real estate
  • Homebuyers fed up with being just renters and want to head toward real homeownership
  • Homebuyers that want to try out a new school district or a new neighborhood prior to making a commitment to it in the long term
  • Homebuyers dealing with damaged credit and who may be currently incapable of qualifying for appropriate mortgage rates because of credit problems
  • Homebuyers who need and want time to get their finances in order before making a home purchase

Q: Is there an obligation on the part of the renter to purchase the home at the close of the lease period?

A: No, there is absolutely no obligation on the part of the renter to purchase the home at the close of the lease period. The seller gives the homebuyer the first option of buying the home, yet the ultimate decision of whether to purchase or not to purchase is totally up to the renter.

Q: Are the down payment and the monthly rent credits going to be given back to the renter if he or she refuses to go through with purchasing the residence at the close of the lease period?

A: The down payment and the monthly rent credits are going to be non-refundable. If one refuses to take advantage of the buying option, then previously money probably will not be returned. This feature of rent to own homes should carefully considered by buyers before entering a lease option agreement.

At a Glance

  • Rent-to-own homes are based on a lease of a residence with an option to eventually buy the residence;
  • The option fee will be paid up at the start of the rental period;
  • The option fee usually falls between three and five percent of the predetermined buying price;
  • The monthly rental credit is a fraction of the monthly rental payments that is put aside to go toward the purchase of the home;
  • The seller of the home pays for the homeowner insurance and the real estate taxes, then the renter/buyer eventually does;
  • Rent to own homes are great considerations for many individuals;
  • There is no obligation put on the renter to actually buy the home at the close of the lease-to-own period;
  • Neither the monthly rental credits nor the down payment are to be refunded to the renter.

Chapter 3: The Pros and Cons of Rent to Own Homes for Sellers

In the previous chapter, the pros and cons of rent to own homes for homebuyers were discussed. While this is important, potential buyers and sellers should also consider the pros and cons that the lease option offers sellers. Sellers considering this option need to consider both the pros and cons before deciding to go this route. Even prospective homebuyers can benefit from understanding the pros and cons for sellers, since this gives buyers a good picture of what sellers will be thinking.

The Pros

Pro #1 – Reduce Risk with the Non-Refundable Option Fee

Sellers enjoy a reduction in their risk by using the non-refundable option fee. When closing a deal on rent to own homes, buyers are required to pay an option fee to the seller, which will not be refunded. This gives sellers a sense of security when choosing this option, since the buyer can walk away from the deal. In most cases, the rent amount paid by the buyer is not refunded when the buyer defaults on the agreement, which also helps to protect the seller, reducing their risk.

Pro #2 – No Commission to Pay

When sellers choose to sell using the lease option, they avoid paying commission to a real estate agent. The commission on a home can total thousands of dollars, but sellers save this money when they sell on a rent to own basis. Along with saving on the cost of commission, sellers usually find a good buyer quickly, since many buyers are attracted by rent to own homes.

Pro #3 – Attract Quality Tenants

Sellers benefit from the high quality of tenants interested in rent to own homes. Most prospective homebuyers that choose this option have a vested in the home and they will treat it as if they own the home. Since tenants already feel like homeowners, they usually care for the home carefully, allowing sellers to enjoy great tenants. Common tenant problems are avoided in most cases when the buyer is planning to purchase the home.

Pro #4 – Command Good Sales Prices in a Tough Market

The current market is considered a buyer’s market, making it tough for sellers to command good sales prices right now. However, when selling rent to own homes, most buyers are attracted to the home because of the excellent financial terms being offered. Homebuyers will enjoy getting a good value when they finally purchase the home and they have time to get their finances and credit in order when choosing this route. All the benefits for homebuyers allow sellers to command great prices, even though they are dealing with a tough market.

Pro #5 – Avoid Vacancies

Vacancies pose a big problem for many sellers working to sell their home in a market saturated with homes for sale. Rent to own homes offer a solution to this problem, helping sellers avoid dealing with long vacancies. Most sellers find that once they advertise the home as a lease option home, they are overwhelmed with potential homebuyers. This allows them to quickly choose a homebuyer, negotiate the terms and get the contract underway. Once a contract is signed, buyers can move right in and the seller avoids letting the home set vacant for months while they try to sell it.

Pro #6 – Continued Tax Benefits

As long as the seller possesses the deed to the home, they continue to enjoy tax benefits. The interest paid on the home mortgage is tax deductible and sellers can continue to deduct it on their taxes until the homebuyer makes the final purchase and the deed is transferred.

Pro #7 – More Prospects

Choosing the lease option when selling a home allows buyers to enjoy more prospects for the property. Instead of marketing the home to traditional buyers, rent to own homes are available to non-traditional buyers and renters. A high percentage of the potential homebuyers who want to buy real estate are unable or unready to get the financing they need right away, meaning that there is a huge market for rent to own homes. More prospects allow sellers to command better prices and get someone in the home faster.

The Cons

Con #1 – The Renter/Buyer Could Opt Out

Sellers must also remember that the renter/buyer has the potential to opt out of buying the home at the end of the lease period. If a homebuyer opts out and decides not to buy the home, this may pose a problem for the seller, since they must put the home on the market once again. Sellers should consider this carefully before deciding to add their property to the list of available rent to own homes.

Con #2 – The Potential for Less Profit

Choosing the lease option may potentially cause the seller to bring in less profit on the home than they would when selling it another way. Since the price is locked in at the beginning of the lease period, home prices could go up over the next couple of years. This definitely benefits the homebuyers, allowing them to enjoy a great deal, but sellers may miss a higher profit.

At a Glance

A rent to own homes contract allows the seller of the home good stream of income;
Sellers can continue enjoying tax benefits with the lease option;
The option fee helps reduce the risk for sellers;
Even in a tough market, sellers can command a good price on the home;
More prospects are available for rent to own homes;
Rent to own homes attract quality tenants;
Sellers may potentially miss out on a higher profit;
Homebuyers can walk away from rent to own homes, which may cause problems for sellers.

Chapter 2: The Pros and Cons of Rent to Own Homes for Home Buyers

Purchasing a home, even with non-traditional methods, is a huge decision. Homebuyers considering rent to own homes need to weigh their decision carefully to ensure this option offers them the best route to home ownership. Looking at the pros and cons of this buying method is important before making a final decision. The following pros and cons should be thoroughly investigated by homebuyers so an informed decision can be made.

The Pros

PRO #1 – Easy to Qualify

The ability to easily qualify for rent to own homes offers one of the biggest pros to homebuyers. Qualification guidelines from lenders like mortgage companies and banks come with specific qualification guidelines and those guidelines are tougher than ever. Some of the common qualifications for conventional lenders include tax records, minimum credit score, affordability ratios, minimum employment history and debt-to-income ratio.

When going with the lease option, the seller dictates the guidelines, making it easier for homebuyers to qualify. In most cases, the main factors may include monthly lease payment, paying the option fee and a look at previous rental history.

PRO #2 – Immediately Occupy the Home

Homebuyers may occupy the home immediately after paying the lease payment and option fee, which is another benefit of rent to own homes. When going with traditional financing, it can take weeks or even a couple months to complete the process and move into the home. Instead of dealing with inspections, home appraisals and gathering various documents, the lease option process is more upfront and makes it easy and fast to move right into the home.

PRO #3 – Time to Improve Credit

Choosing rent to own homes allows homebuyers time to improve their credit before attempting to acquire a home mortgage. With this home buying option, buyers can work on their credit while living in the home. Before signing a contract, consider the amount of time need to improve credit and then choose a lease period that will coincide with the time needed to improve credit.

If the seller is actually providing the financing for the home, credit will be even less of a problem, offering an excellent solution to homebuyers with less than perfect credit.

PRO #4 – Try the Home Before Purchasing

Once the option fee is paid, a partial commitment has been made to the home. However, homebuyers still have the benefit of trying the home before making the final purchase.

In some cases, buyers realize that the home may not offer the benefits they want. At times, declining property values, rising taxes, needed repairs or even undesirable neighbors may make buyers realize that they do not want to buy into the situation. At the end of the lease period, one can walk away without buying the home. Keep in mind, walking away will mean that the option fee is forfeited.

PRO #5 – Save for the Down Payment

Many potential homebuyers find it difficult to come up with the down payment needed to purchase a home, since it can be as high as 20% as the total purchase price. Rent to own homes allow buyers to save for the down payment over time, making it easier to come up with the down payment needed.

Many lease option contracts allow buyers to save with a Monthly Rental Credit. Then when buyers are ready to purchase the home, owners discount the home by the amount paid into the Monthly Rental Credit, which offers homebuyers an equity down payment.

PRO #6 – No Taxes to Pay

While paying rent on the property, homebuyers have no taxes to pay. Until taking ownership of the property, the seller will still be responsible for the taxes on the property. This provides excellent savings to homebuyers, allowing them to enjoy the benefits of the home without having to shell out money on taxes until after making the final purchase.

The Cons

CON #1 – May Pay Higher Sales Price

In many cases, sellers set the sales price higher for rent to own buyers. Sellers may sell at a cheaper price to cash buyers, but often try to get a higher price if going the rent to own route, since they have to wait longer to sell the property. Of course, the price of the home is negotiable. Since the real estate market is current a buyer’s market, potential homebuyers have a strong position when entering negotiations on the lease option, which often allows them to negotiate a lower price than the original asking price of the seller.

CON #2 – Potential of Lease Cancellation

Homebuyers must consider the potential risk of lease cancellation when considering rent to own homes. Late payments may cause the seller to cancel the lease. If the lease is cancelled for this reason, homebuyers may lose the option fee paid in the beginning.

CON #3 – No Tax Deduction for Interest

When buyers finance a home with traditional lending, they may deduct the interest paid on the mortgage. However, while going through the lease period on rent to own homes, homebuyers will not be able to receive a deduction on mortgage interest. For some, this may be a potential con to consider before making this decision.

CON #4 – Rents May Be Higher Than Normal

In some cases, rent paid during the lease period may be higher than normal rent amounts in the area. This may turn into a problem if the buyer decides not to follow through on the option to buy, since the buyer will have spent far more on rent than would have been spend in other rental situations. However, while the rent may be higher, part of that money usually is put towards the price of purchasing the home, which means it will pay off when the purchase is completed.

CON #5 – Potential Title Encumbrances

Homebuyers must beware of potential title encumbrances when choosing the lease option. If the property has any liens or other encumbrances against it, this can cause a substantial problem when buyers are ready to make the final purchase. To avoid this problem, having an attorney or title company verify that the title is free of any encumbrances is important. However, this research is the responsibility of the homebuyer when deciding to go with rent to own homes.

At a Glance:

Rent to own homes do away with stringent lending requirements for home loans;
Rent to own homes allow homebuyers to avoid paying a down payment;
Rent to own homes allow potential homebuyers to fix problems credit problems;
Rent to own homes allow potential homebuyers to establish credit if needed;
Rent to own homes offer the benefit of trying the home before buying;
Title encumbrances can be a problem, which the potential buyer should investigate;
Homebuyers may pay higher than normal rents;
Some sellers may have a higher asking price for rent to own homes;
The potential for lease cancellation should be investigated;
Tax deductions on interest do not apply during the lease period.