Trying to find a house for rent can be very frustrating, to say the least. Most people complain that there just is not enough houses for rent to choose from. You might find the perfect house for rent, but it is not in the right area. Conversely, you may find houses for rent in areas, other than in your desired neighborhood.
As a means to finding more houses for rent, you might want to consider a rent-to-own program. Generally there are more houses available for rent-to-own, then there are only for rent. No need to worry that you have now committed yourself to buying the house. Signing a rent-to-own contract simply means that if you want to buy the house at a later date, you have that option.
But what if your credit is bad, or you have no credit? For most investors bad credit is not a big concern. Typically, they work with a loan officer who will help you repair your credit, often in 6 months or less.
The great thing about rent to own houses is that typically, you get a rent credit, which can be applied to the purchase price of the house. Often, as much as 20% per month for all on-time payments!
Look at the following example:
You find a house for rent, on a rent-to-own program. The option to purchase price is 200,000. After 24 months this rent to own house appreciates in value by the industry average of 4% per year, making it worth 216,320. Now, let's say your rent payment is $1,500 per month. At the end of two years you will have paid $36,000 in rent. But wait! You have a 20% rent credit of $7,200!
IF you choose to exercise your Option to Purchase, you can buy this $216K house for $192,800! The best part is, there will be NO REALTOR FEES! What bank would say no to a loan like that?
So if you are trying to find a house for rent, you just might want to consider rent to own houses too.
About the author: David L. Trosdahl has been the CEO of 3 regional sales & marketing companies and founder of a non-profit corporation. A real estate investor since 1991, David has bought and sold numerous residential properties, and has helped many people find a house for rent. David is a member of the real estate investors association: MNREIA, is founder of the real estate investing website: RentToOwn-MN.com and many others. |
