Moving into a new home is probably one of the most important decisions you can make your life. If you live in the Ocean State or planning to move there soon, there are several options available in terms of finding an affordable way to purchase a new home. One option that many homebuyers choose to consider is rent to own since there are several advantages from this type of option that is available for homebuyers. It is important to carefully weigh all of your options before agreeing to any contracts. Here are some of the advantages when buying rent to own homes in Rhode Island.
When beginning a transaction for buying rent to own homes in Rhode Island, there is usually a requirement that the buyer must pay an option premium to the seller. This payment gives the buyer the option to purchase a home at some determined time in the future. Although it is nonrefundable, this payment can be applied towards the purchase price. Once the buyer decides to buy the home, there will not be a need to pay a high cash price. Option payments are usually applied using low percentages, around 5% (give or take), but some sellers do tend to charge higher option payments which can be a risky decision for buyers since this money cannot be returned.
Chance to Opt Out
When you choose a rent to own option, you have the choice to walk away if you find that something is seriously wrong with the property that you purchased. However, not all rent to own contracts are the same. It is important to find out if this option is included when deciding on a rent to own agreement. Most contracts that include this option will require that you lose all credited money as well as the option fee so it is important to understand the agreement clearly. On the other hand, if decide to opt out, the amount lost will be much lower than buying a house outright and attempting to leave later.
Purchase Price for the Home
When negotiating a rent to own contract, both the seller and the buyer agree to a set purchase price for the home. Depending on the negotiation, the buyer can purchase the home for a set price at some point in the future which is usually between one and five years. When agreeing to a set price, the price that is agreed upon may be higher than the current price. If the price of the home goes up in value at a rate that is better than the buyer’s expectations, then it is a huge advantage in favor of the buyer. If the price of a home goes down in value, the buyer/renter will more than likely choose to not buy the home.
Rent to Own Home in Rhode Island Advantages
Buying a rent to own home in Rhode Island is probably one of the biggest purchases you will ever make. Choosing this type of buyer/renter arrangement by making a monthly contribution in the form of rent is an excellent choice for some types of homebuyers because of its advantages. By choosing an agreement to pay rent that is partially credited towards the final purchase of your home, you can reap the rewards of homeownership in a short period of time.