If you’ve spent time driving around Baltimore MD or browsing Craigslist and similar sites, you may have seen advertisements that read, “Own a home for $500/month. No credit check!” While it seems too good to be true, local rent-to-own homes are a viable option that many Baltimore residents are taking advantage of.
Are Baltimore Rent-to-Own Homes a Scam?
There are scammers out there but as long as you do business with a reputable company or person, renting to own or lease option homes can be a really great way for people get on the path to home ownership. This is especially true if your financial situation is currently preventing you from getting a home loan. You can find hundreds of great articles online from reputable resources that back up the fact that rent to own (also called a lease option by many people) is a legitimate and great way to work your way into home ownership.
Really the rent to own process is a relatively simple concept:
- The buyer and seller come to an agreement on the cost of the home, the monthly rental payment, and how long the buyer will have to purchase the home.
- The buyer moves into the home and begins paying rent. As this is going on, the buyer is working to rebuild his or her credit, or possibly secure financing to purchase the home using traditional means. This allows the buyer to feel that same sense of pride that home owners feel because they’re actively working toward the goal of home ownership.
- At the end of the term, the buyer has the option to buy the home at the price agreed upon in the initial agreement.
Things To Consider With Your Baltimore Rent To Own Home / Lease Option
While rent-to-own homes in Baltimore are a valid business venture, there are many things that buyers must consider.
Purchasing a home is one of the most complex financial decisions that Americans make every year and renting to own is no different. There are several potential pitfalls:
- Unlike traditional ownership, if a renter misses a payment, the entire contract *could* be voided. So make sure to read the fine print and ask the property owner what the default clause is. Any reputable real estate company, like Baltimore Wholesale Property, will give you this information and answer any of your questions.
- If you decide not to purchase the home or are unable to secure financing, any “credit” (if applicable) you may have earned will likely be lost
- The upfront “option fee” for the rent to own agreement is usually a non-refundable fee. Make sure that this home is the right one for you.
- Unlike traditional rental agreements, in a rent-to-own situation, the renter is responsible for most repairs.
Some Advantages of Renting To Own A Local Baltimore MD Home
While renting to own is not without risk (and no financial decision is risk-free), there are a ton of advantages:
- Buyers can get to know the neighborhood before committing to a 30-year mortgage.
- Families can move in quickly and enroll children in the local school district.
- Buyers with credit problems will have time to improve their financial situation.
- The seller has a tenant who has good reason to keep the property in shape.
- The seller will receive monthly payments, which can cover mortgage payments.
- The seller is exposed to a larger potential market by including those without perfect credit.
If you want more information on renting to own a Baltimore house, the process, and our available list of local Baltimore rent to own houses / lease options, click the big link below.
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