Nowadays, Rent to Own is becoming buzz and usually heard from people. Yes, it is becoming popular and that leads to the curiosity of the many. In this article, we will tackle more about it so you can get a clearer understanding of the term Rent to Own.
Is It New: No! Rent to own housing is not an especially new concept. People have used this approach to buy real estate for years. However, its popularity diminished during the years of easy mortgage approvals and the run up of home buying in the early 2000’s. Those days of easy mortgage money are over.
Lenders returned to much more strict loan approvals, and homes do not sell as quickly and easily as they used to. So, the idea of rent with an option to buy has grown again in popularity. Why? Rent to own homes offer a classic win-win arrangement for both home buyers and sellers. It offers a great a solution for buyers needing an affordable and accessible path to home ownership. And sellers use it to help maintain cash flow, keep the property under careful tenant care, and finalize the sale.
A Word About the Words: “Rent To Own” or RTO is a term that’s well known and used in general, consumer language. Real estate pros prefer to use the term “Lease Option” when referring to these types of real estate arrangements. We’ll use both Rent to Own and Lease Option terms, but whenever a renter/buyer is discussing the rent to buy approach with real estate agents or brokers, be sure to use the “Lease Option” phrase.