In the Southern California real estate market today, it’s very tempting to call on one of those ads in the local paper or Craigslist that is advertising rent to own homes in the Inland Empire, Southern California area.
The rent to own option can be a win-win for both parties, but is it always the best method to get into a nice home?
Maybe you can’t sell your home right now, or if you’re a buyer, maybe you aren’t able to get a home loan because your credit is poor.
You could be in a great home that you love and feel a sense of ownership (more than if you just rent a house the normal way) sooner than you thought!
Although, it is always recommended to ask these questions below when meeting with your possible rent to own seller.
Here are some important (smart) questions to ask a rent to own home seller in the Inland Empire area…
“What is the length of the option to buy the house?“
With a rent to own agreement (also called lease option agreement) it’s usually two parts. First, there is the normal rental agreement. Second, there is the option agreement which gives the tenant-buyer the right to purchase the home at a date in the future. Usually the time-frame is a minimum of 2 years. Anything less and you may not reach the credit score goal that you’re aiming for to purchase the home. You need this time to weigh your options and to see if things are looking up for you in the future. Of course the longest option agreement time-frame can be the best for you… to give you more time to get back on your feet credit wise or financially so you can get a traditional home loan.
“How much of my rent will be put toward my purchase price?“
You can read stories all over the internet about how some tenant-buyers were strung along thinking that they were paying a higher percentage than what they actually were for their future home among other factors with this option. Ask the owner/landlord! Recent federal laws have made providing “down payment credits” from your monthly rent very hard, if not illegal in some areas and situations. Usually the monthly rent on a rent to own home in the Inland Empire area is a little bit higher than the monthly rent on a non-rent to own home (because you’re paying for the chance to purchase the house at a pre-determined price which ties the seller-landlord down as well). So just make sure to ask the owner-landlord how much, if any, of the rent will be contributed towards the purchase price if you do decide to purchase the home during the term of the option agreement.
“Who is responsible for repairs and damages on the property?“
This will be depend on the agreement. It can really vary. Generally, you as the tenant-buyer are responsible for general maintenance and upkeep… and for minor things (maybe the first few hundred bucks of a repair). But if it’s a larger repair that wasn’t your own fault, often times the seller-landlord is responsible for the remainder of the repairs after the first few hundred. Again, this can vary, depending on the seller. If you’re looking for rent to own homes in Riverside County… we’ll walk you through how our rent to own program works and answer any of your questions anytime.
“If I’m not able to reach my goal after the option period, can I extend?“
For tenant-buyers who work with us… we’re usually very flexible in working with you to help you reach that ideal end goal: your buying the home! As long as you’re on track to make things work – and the extension makes sense for both of us – we’d be happy to work with you on making your dream of home ownership a reality. If a seller-landlord is honest and fair, they will give you this option. It’s always good to have backup though. Do your homework and make sure you talk to the seller-landlord of the home FIRST and ask them these types of questions before you sign the agreement. Make sure everything is in writing!
“I don’t have the best credit score. What do I need to do to lock in this home?“
Again, a reputable rent to own real estate company like RTO Properties, will help give you resources and connections to help you increase your credit score while you’re renting the home. This may include a referral to a reputable mortgage broker, a credit counselor, or even our own professional guidance along the way. Of course we realize that many of the tenant-buyers who work with us on getting into a rent to own home have less than stellar credit. That’s okay. We’re experienced in working with that situation. But we like to protect our investment as well and we want to work with a tenant-buyer who shows commitment and a safe enough bet that they have a great chance of actually qualifying to purchase the home by the time the option agreement is up.
“May I take a copy of the rent to own agreement to my lawyer?“
The answer should be – 100% of the time – “Yes!” If you’re working with a seller-landlord of a rent to own home here locally that tries to guide you against running your agreement by your lawyer or CPA (or other trusted adviser) you should go the other way. Nothing in the agreement should be hidden or glossed over. There are some important elements in a rent to own / lease option agreement that you need to be aware of. We will walk you through the agreement before you sign, so we’re both on the same page and move forward with confidence and trust. So, make sure that you take the time to review the agreement and that you fully understand it.
So, what’s next? Seeing available rent to own homes in the Inland Empire area
With these tips, it should be fairly easy to weed out the good rent to own sellers from the not-so-good ones.
It’s always harder to find the better ones… the reputable ones… with REAL rent to own homes. When you do find a good rent to own home seller, you won’t be sorry that you went the rent to own route like so many people do.
So, your next step may be to dive in and see available rent to own homes in Riverside County… right?
If you haven’t started your rent to own / lease option search… START HERE!
Simply fill out the short form on the page and start your search to see what we currently have available.
Our rent to own homes in tend to get snapped up fast… so be sure to get on our list and open the email alerts we’ll send from time to time when we get a new rent to own home.
Also, if you’d rather chat with someone about our program or about your situation… call us anytime at (951) 226-5056 or shoot us an email through our Contact Page.
We’re here for you and we look forward to working with you!