Just Some Important Information about Rent to Own and Owner Financing
Owner finance and rent to own are basically the two most common terms that are being used by the people that comprise the industry of real estate investments. The terms rent to own and owner-financing are actually being used in the acts of home financing and investment property financing, for these are methods or ways that may seem unconventional but are still advantageous or well-paid to the people, especially to the buyers. Rent to own is a term that basically refers to the transaction that tend to allow or enable an individual to try out or test-drive the property first and foremost before purchasing it; while the owner financing is a term that basically refers to the transaction that enables or allows an individual who acts as the buyer to purchase the property without going through a bank, and another term used to call this particular transaction is seller financing.
To provide more clarity regarding the term rent to own, it is also defined as a specific type of documented transaction that is made and practiced in a legal manner in exchange for payment per month or per week and the buyer renter also has the option to purchase the property, and the inclusions for the leasing process include the real property, home appliances, furniture, motor vehicles, and consumer electronics. The seller financing or owner financing, on the other hand, is referring to the arrangement that is contractual and the terms, which include the interest rate, purchase price and schedule of payments, may vary and depends on the circumstances. The owner finance option is recognized as the easiest to understand financing option in the real estate industry and it means that the buyer will be the formal owner of the property while he or she is still making payments on it; while the rent to own option is giving the buyer a chance at new real estate markets.
It is best for the people who want to be part of the real estate investing industry to remove the option of using or getting traditional mortgages, and instead, they should choose for the right option for them, if it is the rent to own option or the owner financing option. The similarities between the owner finance and rent to own is that these two options are allowing the buyers to own the property of their choice despite the status of their credit history, these two options can also help the buyers to secure their financial status in the future, and lastly, these two options are recognized as the best options when it comes to home financing and real estate investing.