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Common Myths About Rent To Own Homes

by | Aug 3, 2022 | Uncategorized

It’s amazing how many people are experts on matters they know little about. Information is moving around so quickly these days and we only grasp bits and pieces. Unfortunately, these bits and pieces are not enough to tell the entire story and what we think is a fact is often a myth or some misunderstood piece of information that was added to the pile of knowledge we have on the subject.

When it comes to rent-to-own agreements, there are plenty of myths that need to be corrected.

Myths About Rent To Own Homes

While renting to own a property is a great option for people with low credit scores or little money to put down on buying a home, there still are several parameters you have to pass in order to be an ideal candidate. Even then, you have to reach a custom agreement with the seller and makes sure everything is on par for both sides. This is where many of the RTO myths play a role and get people confused including:

  • No down payments: There are situations where these types of transactions are made where there are no downpayments required. However, that is not the norm and most sellers will want some sort of major financial commitment if they are going to make this deal. The good news is that it is usually less than 20% of the sale price as most interested in these types of deals are considering it because they do not have the 20% to put down.
  • It’s not your property: This is infact your property whether you think it is or not. You will be responsible for every aspect of the property and you need to make sure that you are also covering additional expenses that come with keeping the property maintained and cared for.
  • You are a renter: While you are technically an owner, you are not one where it counts. That means if you do not live up to your end of the deal, the seller has the right to take back the property from you in which case you would be out any money you’ve put in. That’s why the agreements are so important.
  • You can backout whenever: This is one of the biggest myths around about rent-to-own situations. Yes, you can back out of a RTO agreement but it’s not the same as if you were just a renter. Not only would you lose your downpayment, but you will also be subject to paying for any loses the owner may have experienced towards the property including damages.

As with most major financial decisions and strategies, there are always opportunities to research the information and back it up. Remember, when it comes to financial facts, everything has to follow state regulations as well so always research the information based on what state you live in and even get down to the county and city just to be sure.

This research may be needed, not only to understand the real facts and eliminate the myths, but also because it can save you thousands a year and give you a great deal on a rent-to-own property.

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