South Carolina attracts an economically diverse population, with each household having its own particular criteria for real estate. With credit guidelines changing, relocations increasing, and community offerings expanding, the sale and purchase of homes present greater opportunities than in the past. These possibilities can and are being realized in the Palmetto State with rent to own properties. Regardless of market conditions, real property remains a necessity – and solid investment – for families. In South Carolina's residential communities, renting to own can be an attractive option for buyer and seller. While the purchaser builds equity before taking ownership, the owner receives positive cash flow.
When a prospective home buyer remits a non-refundable option fee – a payment akin to a security deposit, about three to five percent of the sales price – more than money changes hands. The buyer is purchasing the right to begin amassing an ownership interest in the house through monthly rental payments. Lease terms ordinarily range from one to three years, during which time the renter's equity grows. Upon completion of the term, the buyer has – over time – made a significant down payment, making the remaining financing easier to secure. First-time home buyers in South Carolina can qualify for FHA loans at below-market rates of interest. Even better, the option fee is credited toward the purchase price.
This arrangement also allows the buyer to live with the house, and learn its strengths and weaknesses close up. The appraisals and inspections that accompany typical property conveyances do not always tell the whole story. On the other hand, a period of tenancy helps buyers to decide whether or not the initial attraction was premature. Beyond the property line, this leasing period gives the tenants a better sense of the neighborhood, the traffic and the community. All the while, the seller/owner is paying the taxes and – most often – taking responsibility for any major repairs of a pre-arranged dollar amount.
Yet the owner benefits as well from the lease-purchase option. The option payment, for example, is the seller's to keep if the renters decide not to follow through with the purchase. During the period of the lease, the owner enjoys a healthy rental income to defray the costs of maintaining the property, including mortgage payments and taxes. Furthermore, the flexible nature of rent to own gives the seller latitude to stick by the original asking price. Local Spartanburg realtors, for instance, regularly report list price statuses over a recent 90-day period. Because of the benefits accorded buyer/renters in lease-purchase scenarios, they may be more willing to accept the original list price than most traditional buyers.
Another perk for sellers is a larger pool of prospects. Willingness to entertain renters as possible buyers expands the total number of interested individuals. In addition, owners may consider those who may have had credit issues that require time to resolve. The rent to own alternative buys them the time while protecting the seller with the non-refundable option fee. In fact, this sort of transaction is win-win for all concerned.