Home buyers have had a pretty rough go of things the last couple of years. While prices keep going up, the restrictions buyers have to deal with are getting tougher and tougher to deal with. You must have higher income, more money to put as a down payment, have a higher credit score and deal with higher interest rates. Yet, people still want to buy homes because the alternative is paying rent. While there are some advantages to paying rent, the fact is that it is literally throwing money away, money that could be used to invest in a property.

Rent to Own Benefits for Buyers

People understand the benefits buying versus renting. However, when they do not meet the typical standards the average buyer needs to meet, what are their options? This is where the rent-to-own opportunities become more interesting, especially when interest rates are too high.

Benefits Of Renting To Own

Renting to own a property is exactly as it sounds. While you are not technically a renter, you are more of a renter than an owner, especially on paper. The advantages for the buyer usually come down to an easier time finding buyers and also having long-term, residual income. However, for the renter, there are far greater advantages including:

• Smaller or no downpayment: If you do not have 20% to put down on a loan you will have to pay mortgage insurance which could add another $1,000 to $5,000 or more a year to the cost of your mortgage. Not having to put down the money allows you to invest in the property in other ways like repairs.
• No interest: Arguably the biggest advantage depending on the situation will be the fact that renter does not have to be concerned about interest rates. Because you are paying a monthly fee that you and the seller agree on, you do not have to be subject to the rates established for borrowing money.
• Credit score isn’t as important: While some sellers will run credit checks, this is not as common an issue in rent-to-own situations. In fact, because credit scores can impact interest rates, even in cases where you have a decent score, you may still be saving even more without realizing it.
• Faster move-in time: Because the title of the property remains with the owner until the payments have been made, the renter does not have to wait and go through all the usual steps. This could be a better option for people who are short on time or moving to a new location.

As you browse through the options of buying a home, you may not have considered rent-to-own as a solution to the challenges you are seeing. Those challenges will not be getting any easier in the near future. Even as home prices drop, higher rates will still make things more challenging for the buyer.

Consider all your options and how they work best based on the type of market you are in and the availability in your area. Rent-to-own properties are available and the transactions are just as secure and legal as renting or buying a home.