Decisions that can have lasting implications, like rent-to-own, can be very challenging to jump into. It's important that you educate yourself about each step in the rent-to-own process before beginning your homeownership journey. For anyone who has decided to start this journey, but are unsure where to begin and what will be required of you along the way, we have provided a roadmap to help guide you.
Step 1: Educate yourself about potential scams
It's an unfortunate fact that when money is involved, scammers will be as well. While the rent-to-own market has many legitimate rental opportunities for potential homeowners, there are occasional scams to watch out for. Make sure to educate yourself on what to look out for when finding rent-to-own opportunities. Once you have learned how to identify a scam, be sure to know how you can protect yourself from scams once you move further into the rent-to-own process.
Step 2: Select your desired rent-to-own home opportunity
Finding a rent-to-own home can be a fun and exciting process. Seeing all the opportunities available in your area is a very enlightening experience that helps many individuals realize the path to homeownership is not as difficult as they once thought. If you're curious how to find rent-to-own opportunities in your area, there are many online and local resources to help you.
One method of finding local rent-to-own opportunities is to review homes for sale in your area. You can approach the owner and ask if they are interested in a rent-to-own agreement rather than selling their home. You will need a great pitch when approaching people who are selling their home, as it can be difficult to convince someone who is already committed to the sales process.
Another way to find local opportunities is to use a resource that curates verified, local rent-to-own opportunities. We have a variety of rent-to-own homes in your area that include photos, address, contact information and more. Browse our lease-to-own home listings inventory online and get connected with a seller in your area.
Step 3: Consult with the Seller
Once you have identified a lease-to-own opportunity, the next step is to have a conversation with the seller about the property, their expectations, and more. This will also allow you to get a good idea of what to expect from the seller, and also help you spot any potential scams. A rent-to-own agreement is an important contract, and you want to make sure you have faith and trust in the seller before signing on the dotted line.
Step 4: Schedule a Showing
Once you have spoken with the seller, and have a good feeling about the property, it's time to schedule a viewing. This cursory inspection allows you to see that the opportunity is legitimate, as well as allows you to note any flaws in the property. Remember, if all goes well this house will someday be yours, so you should take the time to make sure the home is something you and your family will be happy to live in for years to come.
In addition to viewing the home, it's also a good idea to check out the local neighborhood. This gives you a good idea about the type of area you will be living in, and what to expect from neighbors.
Step 5: Consult your credit report, or any lending opportunities.
Many people who are leaning toward a rent-to-own home are on that path due to lackluster credit, or the inability to save up for a large down payment. While a rent-to-own opportunity helps overcome these issues, it's important to remember you will one-day be required to purchase the home. Before you get into an agreement – make sure you have a realistic picture of your credit and finances . This will help you determine how many years you should strive to rent for before being required to purchase the home. In addition, a professional will help you get on the right track to improving your credit so you can get a loan down the line.
Step 6: Do your Research
We can't stress enough the importance of vetting the home owner. Even if everything looks great, it's important to do some background research just to make sure there is nothing unexpected. When looking into the homeowner's history, it's a good idea to check public records for any red flags. You can also check out the property history to make sure the title is clear.
Step 7: Review / Draft a Contract
The contract is the most important part of a lease-to-own. You will want to read this thoroughly to ensure you are crafting an agreement that will be beneficial to you in the end. For more information about lease-to-own agreements, read our article – Everything you need to know about a lease option.
Step 8: Move in Day
Once you have completed all the steps above, you should be ready to move in to your new home. While this is an exciting time, it's important to remember your future obligations. While you are living in the home, take the steps necessary to improve your credit and get your finances in order so you can one day purchase the home and make it truly yours.