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How Rent To Own Real Estate Can Be A Smarter Investment

by | Sep 16, 2022 | Uncategorized

If you are paying a mortgage you are investing in a property. However, getting a return on that property may be decades away. The irony is that you do not mind as much because you are living in the property. We all take a serious look at how our money is being spent and we want to know that we are getting real value and a real return for our money. Regardless of what we are spending it on, we ideally want to get the most we can for it. That’s why we buy products that cost less, especially if we need more of it. The same concept impacts all aspects of investing as we have to learn how and in what ways to utilize our funds.

Rent to Own as an Investment

Investing in your own home is usually a smart idea, especially if you have a steady job and are familiar with the area. Knowing which communities offer the best options for you and are within your budget is essential in selecting a home that has long-term potential for you. However, there are times when things can get in the way of those investment opportunities. If that’s the case, investors look to options that eliminate what they feel is a waste of money like rent. Instead, they invest in properties under different conditions like rent-to-own which offers a variety of investment benefits.

No Interest Payments

The first and arguably biggest benefit of utilizing the rent-to-own option is that you have the ability to skip paying interest because you are not taking out a loan. The concept is that straight-forward as you get to pay a monthly rent without having to worry about interest rates. The seller is happy to get recurring income and a renter who has a personal investment in the property. Because the seller does not have to command a lump sum and will be saving the buyer high interest costs along with other costs of buying a property, the value of the home can be the asking price or even more when you consider this type of transaction on a $400,000 house would save the seller at least $25,000 on realtor fees and other costs and the buyer at least $100,000 in interest payments.

Skip The Headaches

Additionally to those costs is the process of getting the home inspected, appraised and working on all other aspects of transferring a property. In this case, those steps will not be needed and buyers can take advantage of not having to use their savings towards the down payment either. This is great as far as freeing yourself of financial obligations early on, but also allows you to utilize the available funds in upgrading the property if you wish.

Flexibility In Your Investment Future

Extra money is money you can invest with and that’s how investors look at each financial opportunity. With rent-to-own you are eliminating the banks involvement in the transaction and instead creating more financial flexibility for yourself. You can invest that money into the property with needed or wanted upgrades. You can also use the funds to invest in stocks or other opportunities based on your preference.


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