Rent to Own - Benefits and Risks to Sellers

Rent to Own Benefits to Sellers 

·         If the home values are falling at the end of the term, sellers can lock in a higher price at the start of the agreement.

·         Renters who are willing to buy the home generally treat their living space better as they are planning for their future.

·         At the end of the term, if buyers decide not to buy the home, the sellers will keep the original deposit and savings credit as income.

Rent to Own disadvantages to Sellers

·         If a new potential buyer who wants to purchase the home at the end of the agreement with a higher price, the seller still has to abide by the agreement signed with the previous buyer.

·         If buyers decide to buy the home at the end of the agreement, it’s difficult for the sellers to buy another rent-to-own property at that price offered to buyers.

·         Most sellers use the rent they earn to pay the existing mortgage on the rent-to-own property. If the rent can’t make payments, few sellers can afford to pay both rent-to-own property and their own home mortgages, which could force them into foreclosure.