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Renting to Own: Anyone have any experiences or info?

post #1 of 11
Thread Starter 
We are looking into the possibility of a rent-to-own when the money from my old house comes in next month. Tybalt is very leery, dare I say paranoid? about this idea, saying it sounds too good to be true.

Anyone out there have any experiences, good or bad, with this sort of thing? Our only other choices are 1) finding a new rental place, which we've been trying to do since December without any luck at all, so I can't see that working, and 2) buying a mobile home, which I've heard all sorts of horror stories about (property managers deciding to move you to a new lot, changing the bylaws about pets after you move in, etc).

We have to find a place before our lease is up at the end of October, but the landlord is making noises once again like he wants us out sooner, so the sooner the better.

post #2 of 11
I am not familiar with renting to own..how is it different than just having a mortgage?
post #3 of 11
Is this a land contract?
post #4 of 11
Thread Starter 
You rent the house for a set period of time, usually one or two years, and part of your rent is credited towards a down payment. You also need to put a small down payment down before renting as well; these two things become your down payment when you go to buy the place. So you are building a down payment and a good credit reference at the same time. Some rent to own programs I've seen advertised by realtors include in-house financing when the time comes to buy the place, so you are guaranteed a mortgage.

Of course, they're not saying what the interest rate would be....
post #5 of 11
This sounds like your basic land contract. This has it's good points and it's bad. The good is if your credit isn't all that good right now you can put off the loan for another two years. The bad is that the landlord can kick you off the property at any point and you would loose all that you have worked for. What you need to do is go find someone who knows the property laws in your state really well, and see if there is a set of them on land contracts in your state. I know that in Ohio, where I'm from, they aren't that popular; however in California, where property values are outrageous, they work out rather well. You are just going to have to do a lot of research. Also if the people who are setting this up for you don't seem like they are on the up and up you need to get out of the deal ASAP. I hope that helps.
post #6 of 11
Lookingglass gave you some very sound advice. Do a little research before you sign ANY contract. I would never rent any living space unless I had no toher choice. I fell like its throwing good money away. You will never own it. Rent to own is different but I have never heard of a property rent to own just like the furniture store like Rentway.
post #7 of 11
Thread Starter 
Hmm. I'll look and see if there are any property lawyers in the area that offer a free consult to pick their brains.

My credit is beyond ugly.
post #8 of 11
If your credit is bad this may be the only option you have. Just make sure that its a good move and not someone just trying to get as much money out of you as possible!!
post #9 of 11
Thread Starter 
My credit is beyond bad. I lost my house in PA to foreclosure. It doesn't get worse than that!!!!
post #10 of 11
Definitely speak with some property lawyers and get some advice. Renting to Own is VERY tricky and can lose you a lot of money, especially if you decide that you no longer want to live in the house after the renting term is over with.
When we signed the lease for the house we're renting now we did have the option to do the rent to own, but we're really glad we didn't! we've had more problems with that house in the first 6 months then the total number of years I've lived in an apartment!
I know there are a lot of homeowners in MI here that are starting to do that. BUt that's only because there aren't a lot of home buyers here right now.
post #11 of 11
Now even though you have that foreclosure on your bureau you can still fix it. Did you declare BKO? I've never met anyone with a bureau that couldn't be fixed.
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