TENANT/BUYER FEATURES & BENEFITS
If you are in the market to buy a home, you are probably aware of the advantages home ownership provides (tax shelter, appreciation, security, etc). If you are actively seeking homes for sale or on a RTO Purchase agreement, you are either (1) a very smart renter, (2) a very smart real estate investor, (3) not ready to make a commitment, (4) cannot yet purchase a home through conventional means or (5) any combination of the aforementioned.
The RTO Purchase contract provides you with many features and benefits, but perhaps the most powerful one is the rate at which you accumulate equity. With An RTO Purchase contract the buying power can quickly and easily land you a home that you could only dream of buying the conventional way.
Here are some features and benefits for the tenant/buyer:
- Rent money is working towards purchase: Every month a portion of your rental payment (typically $100-$500) is credited towards your down payment and closing cost.
- Minimum cash out of pocket: When you purchase a home the conventional way, you may be required to put down at least 5% down plus closing costs and prepaid fees. When you buy with a Rent-to-Own option, you only pay first month's rent and a small option deposit.
- Frequently no down payment at close: Since you will be receiving your option fee back and monthly rent credits, there will frequently be very little or nothing left to pay for a down payment at closing.
- Profits from appreciation: Since the sales price is locked in before closing (as specified in your agreement), any increase in property value will mean that your equity (what you owe minus what it's worth) can increase in the home.
- Credit problems okay: Qualification restrictions simply do not exist. Your approval is based on your financial situation and income. Special circumstances will be taken into account.
- Control of the home: You will be put in full legal control of the home for a specified period of time without actually having to own it.
- No taxes, less liability: Since you do not own the home (yet), you will not have to pay property taxes and your liability exposure will be dramatically reduced.
- Quick move in time: You can typically take possession of the home in a week or less, instead of conventional move in times of one to three months, after your offer was accepted.
- Maximum leverage: You are spending very little money to control a potentially very expensive, and very profitable, piece of real estate.
- Time: Before you actually buy the home, you will have 24-36 months (depending on your agreement) to repair your credit and find the best interest rates.
- Minimal maintenance: Large maintenance problems or any maintenance problems that exceed a certain amount of money can be delegated to the landlord/seller.
- Privacy: Your name will not be on the deed or in the public records until you exercise your option to buy.
- Peace of mind: You will have full control of the home and can maintain or improve it however you wish.