Is Rent to Own a Good Idea? | Law Office of Ronald D. Weiss, P.C.
Is Rent to Own a Good Idea? If you live in New York and have been thinking about a Rent to Own Agreement, there are some important things to know. What is a Rent to Own Agreement? A Rent to Own Agreement allows potential home buyers to rent a property for a certain period of time (usually five years), then gives them the option to buy at the end of the agreement. The renter agrees to pay a onetime fee of anywhere between 1%-7% of the agreed upon purchase price up front. Some contracts allow this fee to be put towards the final purchase price, allowing the renter to start building equity in the house. The renter may also pay a monthly fee, above and beyond the rent, that is called a Rent Credit. This credit goes directly into covering the down payment of the property. At the end of the Agreement, the tenant/buyer then has the option of purchasing the home at the agreed upon price or walking away. There are quite a few positives and negatives here for both prospec...