We Buy Houses Philadelphia

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Rent to Own — Pros and Cons — Part 2

Since I am currently working on a Rent to Own house in the Philadelphia area, I will continue talking about Pros and Cons for Buyers and Sellers regarding rent to own.  For a summary of what rent to own is see my post Lease Purchase Options (aka Rent-to-Own) – What is it?.

In my last post I discussed the Seller’s Pros and Cons for a Rent to Own.  In this post I’ll discuss the buyer’s pros and cons.

Below is a list of Buyer’s Pros

  1. If the market appreciates during the Rent to Own period, the buyer reaps the benefits. When/if they decide to exercise their option, they would have equity in the house.
  2. Smaller amount of upfront cash. Generally speaking, 2-5% is required to move in as opposed to the 20% needed by lending institutions.
  3. The buyer has time to save more money to use when they decide to buy.
  4. Buyers get to try out the property before they buy.

Below is a list of Buyer’s Cons

  1. Buyer does not get any tax deductions or depreciations. These belong to the sellers because they retain the title to the property till you exercise your right to buy.
  2. If the Buyer does not exercise the option to buy the property, the non-refundable option money paid at the beginning of the lease goes to the seller. You are paying the seller for the RIGHT to buy the property and in return they are taking the property off the market.

January 26, 2010 - Posted by | Uncategorized

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