As part of my real estate investment activities, I offer a rent to own homes program for those renters who want to become homeowners. For those who want to transition from being a renter paying rent (and throwing away hard earned money in the toilet each month) to becoming a full homeowner building personal equity, there will be a huge requirement to become a real action taker.
Specifically, the action is to start saving money rather than spending all the time. This is because home mortgages require large down payments and most renters do not have such funds available.
This is where Rent To Own homes programs can help. Instead of the usual 20 to 25% down payment required for bank mortgages, typically, Rent To Own homes programs require only 5 to 10%, sometimes as low as 3% of a home’s purchase price.
However, many renters do not even have 3% available in cash for a Rent To Own initial deposit. So this is where there is a must to change spending habits in order to become more of a saver to accumulate enough for a Rent To Own program initial deposit. This is where the action taking must come into full gear.
Rent To Own Homes Programs Help Savers Take Further Action
The action taking with saving money doesn’t stop with just the initial deposit. Each monthly rent payment in a Rent To Own homes program will be at a higher rate, usually about 20% higher, compared to usual market rent rates. But at the end of the Rent To Own lease term, both the monthly premiums and the original initial deposit are credited towards the final purchase price of the home for the tenant who will become the buyer of the property.
In reality, a Rent To Own homes program acts like a forced savings program for the future homeowner. Funds are put away each month to save up towards that eventual purchase of the home which will make the tenant/buyer a full homeowner. It helps people take the right action towards the goal of owning the home outright at the end of the lease term.
Of course, it all starts at the beginning with the renter taking action to start saving in order to afford the initial deposit up front as well as the higher than market rent payments each month. So in these ways, renters have to become real action takers in order to successfully transition into becoming homeowners.
For much more information on how such programs work, see a very detailed video on how a Rent To Own Homes Program is structured.
