Have you always dreamed of owning your own place? Are you relieved to find out that there are rent-to-own plans being offered? Do you know exactly what a rent-to-own scheme is?
You may be elated to find out that owning your own home is being made possible through this amazing real estate offer, but before you jump ahead and sign the deal for your rent-to-own space, pause for a moment and see if you’ve got all areas covered.
In black and white
Buying real estate property is no laughing matter. While it will surely thrill you to finally get your hands on your own property, there are some nitty-gritty details that you have to go through and double-check just to ensure that you are not getting the short end of the stick.
When you want to be sure that your investment will bring you the most advantageous returns, then you have to start off on the right foot. Know the particulars of how a rent-to-own contract works so you are sufficiently informed of what you are getting yourself into.
Choosing a rent-to-own plan is one of the easiest routes to take when you want to own a piece of property without being saddled by hefty upfront costs such as a down payment. As such, you don’t want to rush into things. Instead, you have to be careful and thorough in going through the whole process.
So before you sign the dotted line, call in your interior fit-out company, and start fixing up the place, take the time to thoroughly assess and review your rent-to-own plan. Here are some useful tips to guide you along the way:
1. Choose the right rent-to-own plan
How to choose the right rent-to-own plan, you may ask?
First, you have to be acquainted with the terms. Basically, a rent-to-own plan is a type of property ownership where you commit to renting for a specified amount of time. You pay your monthly dues, but in some cases, part of the payment is apportioned to the agreed-upon purchase price.
Now, you have to be clear on the contract terms. There is what you call a lease-option plan where, after the end of the lease period, you have the option to purchase the property. If you found that you do not want or need to live in place anymore, then there is no obligation on your part to buy the property.
Another type is the lease-purchase plan. Here, you sign an agreement where you rent the property for a specific period and when the lease runs out; you are required to purchase the property.
2. Ask for professional assistance
If the terms mentioned above were already enough to give you a headache, then how much more if you delve deeper into the fine print?
If you want to have a better understanding of the terminologies used in the agreement, it is best if you seek the services of a real estate lawyer. This way, you are properly guided through the whole process of acquiring property through the rent-to-own scheme.
There will be plenty of legalese involved, so it is better if you get a real estate attorney who is well-versed in this kind of contract. There are also a lot of legal documents and processes that you may need help with. Your attorney will also be able to help you understand and guide you through the ins and outs of the application process and other government-related systems.
3. Go through the fine print
With the help of your attorney, you can also better understand the details and finer points of the contract. You need to read through all of it and understand what its implications are to you.
For example, you have to be keen on the fees involved. The purchase price, for example, must be clear to both parties. When it will be paid and how much you owe must be specified on the contract. Some contracts determine the purchase price based on the property’s current market value when the lease expires. Most buyers would prefer a ‘lock-in’ purchase price especially when market prices go up.
4. Research the seller
You also have to make sure you research on the seller. Find out about their credit rating to see if they are in financial straits or not. You should also ask for a title report to know how long they have owned the property. The longer it is and the more equity they have, the better it is for you.
If you are using the service of a property specialist, make sure they come from a reputable company. Check if they are licensed because this can boost buyer confidence, as well. Find out how established the property developer is. Verify their experience and expertise. It is best that you always rent or buy real estate only from trustworthy and reliable companies.
5. Check out the property
As much as possible, schedule a look-around. If it’s not viable to do it in person, then you can do a virtual tour.
If you can, ask for an independent appraisal to get an unbiased review of the facts. It’s best to obtain a detailed inspection report so you will know if the property is still in good condition.
Also, check if the property taxes are up to date or there are no liens on the property that you are eyeing.
Home sweet home
If you want to turn your dream home into reality but do not have enough money for the required upfront costs, then resorting to a rent-to-own plan is your best bet.
Make sure to check the fine print, hire a real estate attorney to guide you through the process, and engage with reputable real estate agents or firms. When you follow these steps, you can look forward to stepping into your very own home in no time!