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RENT TO OWN FAQs
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Rent To Own is a type of an agreement in which a tenant rents the property for a certain period of time, with the option to purchase the property at the end of the rental period. Some programs help you save up for a downpayment and others don’t. Programs with built in savings typically have a higher rent than the market rate, with a portion of the rent going towards the down payment for the purchase of the home.
No. Minnesota rent to own program are not mortgage companies/lenders and will not arrange or provide mortgage services. You will ahve to work with your loan officer to obtain a home loan when you are ready.
To begin the process, please fill out Pre-Application form so we can help you find the best rent to own program that fits your needs.
We ask our clients to schedule a no obligation consultation with us to save you time and money on applications. Allow us to learn more about your situation so recommend the best program that fit your needs.
General requirements are the following (will vary by program provider):
- Allow ~ 60days from the time that application is accepted for move in
- Annual household income of $50,000+
- Stable employment
- Min Credit score 620+
- Deposit is 2 x monthly rent amount
- No history of eviction or other landlord issues
- No pending bankruptcy
- No disqualifying criminal history
Once your application is approved with your Rent To Own program provider, you will know the budget you can shop in which will help us find homes in your range.
Most of the homes that we work with are currently offers for sale and have to be purchased by a third parrty Rent To Own program provider before RTO terms can be offered to a prospective resident.
As your real estate agent, we do not charge you any fees. No commissions or admin fees, no appraisal fees, no closing costs, etc. However, you will have application fees, deposits and other move-in expnses that will come up directly with your rent to own program provider of choice.
Yes. Most program providers allow pets. Some have restrictions like number of pets, weight and breed restrictions.
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No! Both are very different agreements. Typically, you would need to put 10-20% down on a contract for deed and it is an actual home sale/purchase transaction. Rent to own is a lease agreement. No actual sale happens. Schedule a no obligation consultation with us so we can answer all of your questions.
In a rent-to-own agreement, the tenant rents the property for a specific period of time, usually one to three years. During this time, the tenant has the option to purchase the property at the end of the rental period, usually at a pre-agreed upon price. The tenant also typically pays a higher rent than the market rate, with a portion of the rent going towards the down payment for the purchase of the property.
There are several benefits of renting to own a home. For one, it can provide an opportunity for the tenant to live in the home and get to know the neighborhood before committing to purchasing the property. Additionally, it can allow the tenant to save money for a down payment and improve their credit score, which can make it easier to secure a mortgage in the future. One of the biggest benefits is locking in the price now and buying the home later.
There are several risks associated with renting to own a home. For one, the tenant may not be able to secure financing to purchase the property at the end of the rental period. Additionally, the tenant may not be able to afford the higher rent and expenses associated with the property. If it is a private arrangement, he property owner may also be unwilling to sell the property, despite the tenant’s option to purchase.
When looking at a rent-to-own agreement, be sure to review the terms and conditions of the agreement carefully. The terms of the agreement should be clearly defined, including the rental period, the purchase price of the property, the portion of the rent that goes towards the down payment, and any other terms and conditions. It is also a good idea to have a lawyer or real estate professional review the agreement before signing especially if you are working with a property owner directly.
A rent-to-own agreement and a lease option are similar but not the same. In a lease option, the tenant typically pays a non-refundable option fee, which gives them the right to purchase the property at a pre-agreed upon price at the end of the lease period. In a rent-to-own agreement, the tenant pays a higher rent, with a portion of the rent going towards the down payment for the purchase of the property. In the end, both achieve the same thing of making you a home owner sooner!
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We are an award winning team of real estate professionals in Twin Cities and surrounding areas.
Rent To Own Programs is one of our core specialties and it would be our honor to serve you.
Whether you are looking to test drive a home or a neighborhood without making any commitments of buying or just want to become a homeowner sooner – we are here to help!