5 Reasons to Consider Lease to Buy Options
By MGB • Nov 16th, 2011 • Category: InvestingOne option you’ve probably come across in your house hunt is the lease to buy home. A lease to buy home is an option where the buyer pays a certain percentage up front and agrees to lease the house for a certain length of time, both of which are determined by the seller. The money the leaser pays is applied towards the purchase of the house. At the end of the lease agreement, the leaser can then choose to purchase the home or walk away. Here are five reasons to consider a lease to buy home.
Low Upfront Payment
The price to get your foot in the door can be as little as one-percent. For many people, especially first time buyers, this is a great way to get their first home. Just imagine being able to move into your first place for as little as $1,000 for a $100,000 home.
Ability to Build Credit Before Purchase
Another reason to consider a lease to buy home is your credit. If your credit isn’t as perfect as the bank would like for it to be, or you’ve only been employed a couple years, this option will give you the chance to build your credit. It’s important to note that paying your lease will not build your credit. This will have to be done through credit cards and loans.
Try Before You Buy
It’s not uncommon for people to move into a home and find out there’s something they can’t stand. It might be noisy neighbors, a train that runs at 3AM or a number of other nuisances. With the lease to buy option, you’ll have at least a couple years to decide if this home is where you want to stay.
A Great Option for Renters
If you’re not exactly ready to fork over such a large amount of cash for a new home, the lease to buy option is perfect. Why should you continue to pay someone else’s bills when you could be living in your own home for the same price? Even if you decide not to purchase the home, you’ll probably come out better than if you had rented.
Builds Equity in the Home
The money you pay on the lease is put towards the equity in the home. This means when it comes time to purchase the home, you may not have to worry about obtaining a down payment because the 20% has already been paid on the purchase price. This is a wonderful and affordable way to obtain your first home.
As you can see, a lease to buy home is a great option. Not only does it allow those with poor credit to buy their first home, but you get to try the home out before you purchase it. Best of all, this option builds equity in the home, which means you may not have to pay a down payment when it comes time to purchase it.
About the Author: Stefan Pistole loves watching for real estate deals in his area. He also enjoys using groups like Tenant Hunter to help find occupants for his investment properties and highly recommends the use of any sort of rental management agency.
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