A rent to own agreement is a mix between leasing and buying. It is beneficial to both the landlord and tenant in several ways. It gives the tenant a chance to live in the house and know if the life in the chosen community is acceptable before buying the house. It can also be a great way to build credit before buying a house since the tenant pays monthly rent before buying. Landlords get a chance to know tenants before selling the property to them. It can also be a method of attracting buyers of a house during periods of market downturns when buyers are few and far between. Landlords who choose the rent to own option can also begin creating an income stream immediately. For those homeowners who may be close to foreclosure, lease to purchase is a great way to avoid this predicament.
It some cases it is important for the tenant to save enough money for a down payment before going for a rent to own property in New York. It is also important to build your credit before getting into the agreement. Some landlords give lower rates and require less down from tenants who have shown a tendency to pay on time.
If you are seeking a rent to own property in New York, it is wise to have a lawyer review the agreement so as not to bring any surprises in the future. Landlords should ensure that such an agreement is drafted by a competent lawyer to make sure that it takes care of their requirements and is legally binding. There are online rental agreements that have been pre-written by a lawyer specifically for New York that are ready for instant download. The rent to own property agreement is a mixture of a purchase agreement as well as a lease agreement.
There are some clauses of lease to own property agreements that you should be aware of. Some agreements state that you have to settle the monthly rent on a certain date of the month or anytime prior to that date. If you are late to pay the rent, the amount will not be counted as part of the purchase price for buying the home. You can also be charged a penalty for late payment in some agreements.
The maintenance cost of the house is usually borne by the tenant. Things like broken windows, peeling paint, and other minor repairs are carried out by the tenant in many cases. Repairs that are necessary in order to put the house in a habitable condition are typically the responsibility of the landlord.
Often times the tenant will be required to pay a deposit anywhere from between 2.5% and 7% of the final sales price. This payment is usually non-refundable and is usually considered to be part of the sales price. In the event that the tenant does not eventually buy the home, the money is lost to the landlord.
In order to ensure that you don't get short changed in a rent to own agreement, you should always read over the entire agreement before signing. You can also hire a lawyer to review and interpret the agreement for you. Before signing a rent to own contract, be sure you fully understand what you are agreeing to. Many landlords are negotiable and will work with their tenants when drawing up the contract.