Real estate investor Richard Vesole recently explained how rent-to-own properties offer unique opportunities for aspiring homeowners.
Rick Vesole is a real estate investor and the owner of more than 600 single-family rent-to-own homes. Vesole stated there are a lot of misconceptions about rent-to-own homes and the pros and cons of purchasing one. He recently discussed how rent-to-own properties are beneficial for individuals eager for homeownership.
A rent-to-own homeownership agreement involves committing to renting a home for a required amount of time. The renter may also make an offer to purchase the home before or when the lease runs out.
There are two types of rent-to-own contracts: lease-option and lease-purchase. The lease-option contract gives the renter the option to buy the home when the lease is complete, and the lease-purchase contract requires the individual to buy the house.
The renter/buyer pays rent monthly throughout the course of the lease. Sometimes, this rent becomes a portion of the payment for the home. The renter may also be responsible for maintenance and repairs on the property, which is uncommon in rental agreements that are not rent-to-own.
Rent-to-own is not for everyone, but it can be extremely beneficial to some. Rick Vesole explained it’s important for individuals to research if a rent-to-own agreement is right for them before taking the leap.
It is most useful for individuals who do not yet have the finances to purchase a home. Vesole explained that the rent-to-own process allows some buyers the opportunity and time to improve their credit scores or save for a down payment.
Choosing the right place to live is a major decision. A rent-to-own situation allows individuals and families time to familiarize themselves with the neighborhood before going all-in on a purchase.
Signing a rent-to-own contract can help individuals lock in the asking price for a property. Housing prices can fluctuate drastically based on the local economy and a variety of factors. Vesole suggested individuals truly interested in purchasing the property include a locked-in asking price in the contract.
A typical rental agreement often leaves the renter feeling detached from the home because it is not technically their own. A rent-to-own agreement offers the peace of mind, security, and joy of homeownership, even though the product is not fully the renter’s yet. Rental payments often contribute to the down payment for the home, which will become home equity farther down the line.
Richard Vesole is one of the largest owners of single-family rent-to-own homes in the Quad City metropolitan area. He is a real estate investor and attorney specializing in real estate law. Vesole explains that rent-to-own agreements are expected to rise and become even more helpful as younger generations struggle to save the finances needed to purchase a home outright.