Rent to Own House in Tagaytay
What You Need to Know About Renting-to-Own a House in Tagaytay
What Is The Rent to Own Scheme?
Rent-to-Own is an alternative for individuals who want to own a property but find it hard to secure a loan or provide a downpayment. Rent-to-Own is an agreement between the owner and the tenant to rent out the property with the option of buying it on a certain period of time or on the purchase date agreed by both parties.
What Makes It Different From Renting Or Buying?
Renting is paying for a home on a monthly, quarterly, or yearly basis. The tenant will have a contract with a specific duration of stay and a specified amount to pay. It will require fewer requirements and would usually ask for advance payments and a deposit fee. The tenant would never own the property. The deposit fee will be refunded once the contract ended, but will be lessened depending on the damages done or repairs needed for the property.
Buying a property, on the other hand, would require a good amount of money for the downpayment and the closing fees aside from the actual sales price. Before securing a property to buy, it would also require a good credit score. With a good credit score, the buyer can apply for a loan and qualify for a mortgage. This means he/she doesn't have to pay for a rental fee. All the money he/she pays goes directly to the mortgage or to the payment for his/her home.
Rent-to-Own is somehow like buying a house but on an installment scheme. The rental fee includes a premium which serves as a percentage of the downpayment for the property. Rent-to-Own is also an option similar to renting which would allow the tenant to live in a specific area without the commitment to stay there for several years. That is until he/she decides to pursue the purchase.
Rent-to-Own is owner-financed. Therefore, the contract can be tailored depending on the needs of both parties. For example, they can agree to rent out the place for three years and then the tenant can start buying it afterward. The tenant can use this lead time to increase his/her credit score.
Why Is There A Big Demand for Rent to Own?
People are starting to find options or new ways of getting their dream house. This new alternative which offers flexibility arises amidst all the 'for rent' and the 'for sale'.
Rent-to-Own is an option beneficial to both the tenant and the seller. This helps individuals own a property in a less complicated start, and this also ensures the target sales for the seller. This arrangement is also offered in different types of real estate properties.
Pros and Cons of Rent to Own
All types of investments, no matter how big or small, has its sets of advantages and disadvantages.