Read about any of the reviews regarding the Ultimate Rent-to-Own Home Program, this list of rent-to-own homes, and an aggregate system for RTO properties, and you’ll know right away: the RTO home industry is still as popular as ever….
You heard correctly: even high-profile firms are seeing the value in the RTO home industry. Rent-to-own makes more than the mark. It’s seeking to revolutionize the housing market regarding credit repair thanks to recent developments on one of the most prolific rent-to-own companies — aside from the prestigious organization the H.O.P.E. Program — a “little” corporation known as the Home Partners of America (HPA).
But before we get to the goods on what’s going on in this RTO home industry with respect to the HPA, let’s understand exactly what rent-to-own is all about:
Forget the negativity of an option that is rent-to-own and realize that there’s a direct benefit not just for the homeowner, but the home buyer here. All sorts of rent-to-own programs existed through small operators became the rage back in the ’90s as a way to provide an alternative to consumers who may not have a whole lot of cash saved up for a sizable down payment on a mortgage. Understandable. However, almost as quickly as the RTO home industry started seeing some gains, the trend declined due to easy lending choices with no money down — which, as you know, most definitely contributed to the unfortunate housing crash in 2008!
Essentially, the RTO home industry was all about negotiating a deal between the homeowner and the potential home buyer to rent the home for a specific length of time with an option to buy later down the road as credit improves and the home renter saves up enough money for a possible down payment. Sounds good, obviously, but there were cons to the RTO home industry, such as a higher rent and purchase price the longer they rent vs. the fact that those potential home buyers get to lock in that home at a price (which could be a negative, too) and try out the home and neighborhood to see if it’s a great fit for the individual or family. In a sense, the RTO home industry provided something rarely seen in the housing market: flexibility.
Given the fact that lenders nowadays are setting the bar so high, what with credit scores being the make-or-break deal in securing that mortgage loan, it’s now a sure thing: the RTO home industry’s rising again, and for good reason. The HPA sought to target this market that hadn’t seen any development for years since the crash, and it looks as if they’ve nailed a chance to stimulate the industry and get people into homes without issues of foreclosure or decline.
This is how the HPA operates — you’ve got a consumer looking for a home (obviously, a rent-to-own home) and collaborates with a real estate agent. Of course, the HPA has literally an empire of approved communities in suburban locations with solid school systems for families; additionally, prrices range from $100K to $725K, so you’re looking at an RTO home industry that blankets the entire range of possibilities for home buying.
What happens, of course, is the HPA then actually purchases the home from the seller, leasing that home to the prospective consumer. The deal is the consumer becomes a home renter with the actual right to purchase the home after a set period of time. There is an expectation that the home renter has to work on repairing credit for approval of a home loan as well as saving for that down payment, but here’s the catch: the longer that home renter is renting on the property, the more they may have to pay just to buy the house. Interesting trade-off. But with the right rent-to-own resources, and education on the RTO home industry, while it may benefit the homeowner, you’re looking at a great option for the home buyer!
If you were to go on the HPA website, you might see a home shown at a listing price of $449,975 in Chula Vista, CA, with the option for a potential home buyer to purchase at a price of $472,035 just after one year. Now after five years of renting, the home buyer would be looking at a $573,762 purchase price — a 28% markup from the original listing.
Sounds bad, yes — but when you’re informed of the stipulations beforehand and you know what to expect, without even worrying about whether or not a bank will approve a home loan for you — for many families out there, that’s a great deal! Security. Insurance. Assurance. Those are now the main assets in this housing market, thanks to the RTO home industry.
Given the rising prices in our market at the moment, it’s not far off the apple tree — but make no mistake as those potential home buyers will be paying a premium due to a rent-to-own. Your typical 30-year conventional mortgage for the exact same listing in the example would go for just $1.8K. Now with an average single-family rental payment of $2.270K/month in San Diego, this is what the prospective homeowner’s paying extra for — the lock-in for buying that home without any chance of it falling through. Something many people see in the real estate market, for good reason (we, after all, don’t want to see another housing crash, right?).
A sparkling credit score, and a good down payment: that’s typically what we end up seeing in a traditional mortgage, something that doesn’t always work out for the average consumer. So, naturally, a chance to repair credit while living in the home, plus potentially getting the loan at the lease option to buy with zero down, just might be worth the extra price in rent, don’t you think? And here’s an even better benefit for that home renter: the tenant isn’t required to buy!
The HPA isn’t the only organization seeing a profit in the RTO home industry. Home LPC in NYC and Premium Point Investments have also thrown their financial hats in to see if there’s a profit to make in buying these properties and renting them out with a lease option to buy. More and more homes are being bought out for the purpose of rent-to-own; and due to the flexibility not only for the seller/company as well as the renter/buyer, it’s quite hard to see any disadvantage.
You just have to remember one important point when it comes to the RTO home industry — you need to know where to look, what to do, how to do it, and someone to help you do it all the way through. Something that may actually come a little easier for a prospective homeowner than saving a ton of money for a down payment and getting that mortgage approval….
The post The Current State of the RTO Home Industry: a Continuing Trend appeared first on RentToOwnReviews.
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Don’t knock the home renter one bit. Because that’s the start of a journey toward home ownership when you think about it. Name one person out there either in college or fresh out, and that person will tell you: home renting was how it all began. You learned about maintenance, utility bills, even home improvement, and you certainly learned how to negotiate like a real estate Jedi master, so clearly home renting’s very much like training for home ownership. Hence that’s why this little comprehensive site called Assisting Renters makes such a dent in terms of resources for the everyday home renter looking to advance the lifestyle and living for the ultimate preparation: a rent-to-own home, or perhaps even a zero-down mortgage.
It’s all pristine and viral, nothing but positivism in this real estate cyberspace, so you know you’re dealing with the essentials: everything from home security, to credit repair, to identity theft protection, to entertainment needs. Everything. And being a member gives you access to these resources for free, and many of these resources are of little to no cost to the potential home renter or soon-to-be homeowner.
But don’t take my word for it. Read up on these reviews:
And that’s just the beginning, honestly.
You can expect plenty more content on services like Assisting Renters, and that’s just one resource out there that may help you. If you’re in the market for a rent-to-own home, though, one thing’s for sure: we can consult you, so contact us today, and we’ll help get you into that home as soon as possible. Heck, even Assisting Renters reviewed us, and they say we’re pretty cool!
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The funny thing about HOAs (Homeowner Associations) is that they legally can choose to work with — or not work with — the ‘tenant’ in question. You’re all throwing your arms up in disgust, thinking that it’s unfair given the fact that tenants may have rent-to-own agreements with condo owners, for instance, right? Of course the HOA should work with you! Of course you can represent your landlord in this case. You’re going to own the condo anyway, correct?
That, therefore, means the HOAs can choose not to even work with those tenants possessing rent-to-own agreements. By law, they would have to work with the actual condo owners themselves. You, as a tenant-soon-to-be-homeowner can’t represent that condo owner, not even a little bit.
The fact is even if your landlord asks or expects that you interface with an HOA, the HOA can still turn the cheek and say NO…. “I need to speak to the owner.” You literally can’t do anything about it until that property’s legally yours. At that current moment, you’re nothing more than an occupier, paying rent.
As with all contractual law, though, it can be something stipulated and allowed by an HOA in regards to rent-to-own agreements. But you need to be well aware of that in writing. If it’s not in writing, don’t expect to get anywhere with representing your landlord for the HOA regarding anything about the property. You’d have to contact the condo owner specifically instead.
Most definitely. And in the real estate industry, everyone has a role — whether you’re a tenant, buyer, owner, seller, agent, broker or whoever. Heck, even the plumber has a role! You simply have to remember that while you’re renting, you’re a tenant. When you’re finished with all rent payments for that period, you’ll be something more…. Any other questions about rent-to-own? Feel free to peruse the site even more!
Brace yourself: this is going to be difficult. As with anything in the real estate industry, you end up thinking you need either a real estate attorney or maybe Superman to wrap his brain around the concept of knowing the difference — between a rent-to-own and a land contract. Not even a kryptonian could honestly figure that one out (which is why you have our rent-to-own consultants helping you out with this one!).
Get interested when a potential seller even mentions this term. It’s an intriguing way for a seller to basically sell the home without giving up the title, basically. You, as the buyer, can purchase the home through contract and essentially pay “rent” (for lack of a better term), and when you’ve paid the entire purchase price for the home, the title to the property’s all yours.
In a way, it’s like leasing a car. You get to drive it. You get to maintain it. You get to go on a road trip clear across the country if you want. But you never get to own it — and that means you can’t sell it or perhaps even upgrade it — until you finish paying it all off. Certain advantages and slight disadvantages there, obviously. You can see why you might want to ask this along with other inquiries about rent-to-own.
The only way I can differentiate on this is that it’s largely dependent on an agreement typically made by the home seller. An offering for a land contract focuses mainly on the entire selling price — whereas a rent-to-own keeps it as a tenant-landlord deal for a specific period of time with an extra portion of each monthly rent going toward a down payment for ownership of the house.
It’s convenient. It’s flexible. And that’s the key. A land contract seals you in for the deal, for the long haul. You can’t back out of it without some form of penalty, because you agreed to basically own the house later on. But a rent-to-own simply offers the option — if you want it (which most of the time you would, provided you negotiate the best of terms for both parties).
Like looking into a mirror or something. But don’t be fooled. A land contract is so different from a rent-to-own that it’s scary. Just be well-informed. Because while you might want to just stick with a full lease on a house and make those payments as if its a mortgage, know that you don’t have a lot of wiggle room….
But a rent-to-own? That’s a whole different story and superhero altogether.
To get help finding a rent-to-own home, click here.
The interesting thing about rent-to-own properties is how private and flexible they really are. There’s no specific basis for them, especially from a real estate broker standpoint. In fact, brokers and agents for the most part wouldn’t care too much about rent-to-owns, because there’s not that much in it for them. Typically, rent-to-owns are all about two parties, and that’s it: the rent-to-own occupant, and the owner. Because of that, there’s a lot of room for negotiation, but do be cautious.
You might even be completely solid on the fact that you will buy the property when the time comes. Even the contract will have an agreed-upon price and down payment after a set number of rent payments have been made. The landlord may know, without a shadow of a doubt, that you’re going to buy the property when the time comes. But you’re still a rent-to-own occupant. A tenant. And that means you don’t have the right to make decisions regarding the property without the owner’s approval.
So when asking the question — out of many questions to ask about rent-to-own — “can I just sell the house to somebody else and pay you the difference?”, know that you’re playing with legal fire in a big way, and you’re going to get burned.
Case in point: you don’t own the house, yet. You, therefore, can’t sell the real estate to anybody else.
One thing to know about your P’s and Q’s, though, is that your contract might allow you to rent out the property. You might even be allowed to hand over the rent-to-own agreement to somebody else, making that other person the rent-to-own occupant. It has to be in writing on the contract, though — or legally the landlord (owner) can simply say “no.”
We can help, as we’re your rent-to-own consultants. You may be a rent-to-own occupant anytime soon, because you’re interested in the prospect. Just know that you have no P’s and Q’s running off; we’re constantly vigilant for you.
A lot of people don’t know this unless you’ve enrolled with the BBB A-rated H.O.P.E. Program: you can actually add your rent payments to your credit report! Shocking, right? The real estate industry is truly an evolutionary model in ways we all can’t imagine. This changes the game for many, particularly when dealing with a rent-to-own contract. You essentially get the best of both worlds….
Sometimes known as credit restoration, the simple fact that you’re basically itemizing all of your rent payments onto your report will boost your score by leaps and bounds. That’s a good thing given the fact that you’re going to sign a lease contract to buy the home for a down payment, and with a possible 640+ score, you’re sitting pretty good on that pedestal, aren’t you?
Additionally, you could easily go with a firm like Lexington Law while you’re comfortably renting to get any negatives removed, not having to worry about home improvements (because the landlord will then take care of those!), and get your score looking even better than it will when the time comes for you to buy.
You just might find that you’ll qualify even with bad credit. Because in the long run, as long as you’re making those payments, you’re benefiting tremendously through credit repair.
It’s important that you consult with us, your rent-to-own consultants, further about your situation. You never know: that rent-to-own home just might be the right fit for you. But you don’t go into it without the knowledge, understanding and application to negotiate the terms, because remember: ask the right rent-to-own questions, and you’ll get the best outcome. Sure, you’ll pay more out of pocket for rent each month, but that extra money’s going to go into that down payment when you buy, and you just might squeeze even more savings if your credit’s looking sweet.
Yes. Sweet like candy. And we all know that a rent-to-own is exactly like that: candy. GET YOUR CANDY RIGHT HERE.
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People talk a lot about rent-to-own homes like it’s the new innovation in the candy business. After all, when the Snickers bar first came out, everyone was in a rush about the novelty and ingenuity of merging chocolate and nuts together, so the rage made waves, for sure! Rent-to-own is like that — it’s candy. It’s yummy. But if you’re not careful or haphazard about rushing into an agreement without asking the correct questions, you could get yourself into a lot of hot water (or wrappers all over your floor, plus a few toothaches).
The thing is not every seller/owner out there will say flat-out what the deal is. To them, they’re thinking they just need a tenant. But what about rent-to-own? I can imagine many sellers/owners would blink at the idea, so it is important to ask about it and know what you’re getting into.
There’s a lot of negotiation that comes into play with a rent-to-own, so it’s no surprise that questions get asked on a regular basis. The thing to remember is this: what are the right questions to ask? Clearly you have an advantage with all the rent-to-own reviews available in the market right now.
It’s imperative that you know that not everyone is in the know — especially sellers/owners. Most don’t know what the heck is going on, especially when they’re dabbling in the prospect of a rent-to-own. Our rent-to-own consultants can educate them. We can educate you. And we can make sure that rent-to-own works out well for both.