Is Rent To Own The Way To Go? Ask Senior Living Placement Agency Georgia

| Saturday, June 16, 2018
By Anthony Burns

Rent to own schemes may appear to be the solution to a daunting problem, however, is it really? Owning your own home or property is an aspiration that all work towards, however, in an economic climate that is fast dwindling, finance is hard to come by. Prospective homeowners are seeking Senior Living Placement Agency Georgia to achieve their dreams, but, is it the right choice?

Owning your own home, especially one that you have dreamed about, is an aspiration of all. The economy is, however, such that banks are becoming stricter about offering mortgage loans as freely as they once did. Money is scarce, and banks and other financial institutions are going to great lengths to ensure that they will always get their money.

The scheme is in effect a lease agreement. The seller of the house allows the purchaser to rent the premises for an extended duration of time plus the inclusion of additional payments, at a designated time in that period, the person leasing the property has an opportunity to purchase.

When it comes to schemes like this, the prospective purchaser needs to understand the financial implications, and risks involved. Besides the normal monthly rental, the prospective buyer, who is leasing at present, is responsible for paying all the additional fees relating to the home, including rates and taxed for the property.

For instance, you may have already been leasing the property for some years, however, it only takes on missed payment to bring the walls crashing down. The person leasing the property to you at this point could decide to end the deal, forcing you to forfeit what has already been outlaid, or you could end up paying an inflated end price when the time comes to make the official purchase. Another very real possibility is that at the time of purchase, you may not be able to get the mortgage required to complete the deal, and you risk losing it all, the money you have paid, and the home you have made.

While the scheme appears to be the answer to the problem posed, there are risks associated with undertaking a commitment of this nature. Although the end result will be for you to own the property, your name is not on the title deed, and you are merely a person who is leasing at present. Should you miss a payment at any time, you run the risk of losing all that you have already paid towards your future home, and may even be forced to pay an inflated end price to secure it. Besides the risk of losing all that you already paid into your prospective new home, you may, at the end of the proposed lease period, still not be able to acquire a mortgage for the balance, and will in essence lose all the payments you have already made, including any additional work you have put into the home, and in some instances the property itself.

You must remember that there are two parties to the rent to own agreement. While you, as the one leasing, may not encounter any problems, that is not to say the owner of the home won t. Should that owner still be indebted to a financial institution, and miss one of their own repayments, the institution has the right to repossess the property. In this instance, you have no claim to the property, and all you have forked over in monetary value is lost.

While it may not be the ideal situation, it is sometimes best to undertake your first real estate investment as one in which you will not live. Many can afford to buy a property, and rent it out as a secondary income, however, are unable to live there themselves. There will always be an opportunity at a later stage to take your earnings and reinvest it into a property for yourself.

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