If you are looking for a rent to own contract, there are actually a few different options that you can go with. The two most common types are the lease option agreement and the lease purchase agreement. These work in slightly different ways so it is a good idea to know what they are and how you can use them for your own needs. Let’s take a closer look at each one.
Lease-Option Agreement
If the renter gets into this type of agreement and they will need to pay that option fee when they sign the contract, then this is known as a lease-option agreement. One of the benefits of this type of arrangement is that the renter will often have more power to negotiate about their option fee in the beginning.
Once the contract starts, renters will be able to pay rent credits or some additional payments throughout the lease. The rent credits are used as a down payment to help them purchase the home. When the contract expires, the renter will be able to negotiate on the final purchase price, though it is often listed within the contract to keep things easy to understand.
Lease-Purchase Agreement
If the renter pays a portion of rent each month to the down payment on the home, then they are entering into a lease-purchase agreement. The biggest difference here is that you will pay the extra during the one to three years, rather than paying it all upfront. This one also allows you the option to not purchase the home when the lease is done. If you don’t make enough, you aren’t able to get a loan, or the market goes down and you no longer want the home, this is the option you will want to go with.
There are some options that allow you to do a bit of both with the home, but it will depend on what the seller and the renter decide to work on together. There can be risks involved for both sides, so it is important to take a look at both sides of the process and see which works the best for you.
Our three bedroom apartments in Kirkland will provide you with all of the space that you need. We are proud to offer a wide variety of different apartment sizes and amenities to make sure that you are able to choose what works right for your needs. We welcome all of the questions you may have and hope that you will come and take a tour and see what all we have to offer. Contact us today to learn more.
