Mobile Homes For Rent To Own: Is It Worth It?
Mobile homes for rent to own can be the perfect solution for a budget conscious homeowner. One can have the satisfaction of owning a home without having to come up with a hefty down payment or exorbitant mortgage payments. The ideal situation allows you to take a portion of your monthly rent and apply it towards the equity in the property. For many, this may be the only way they can own property of their own. However, some people may wonder if taking the risk of owning a mobile home is actually worth it.
Rent May Be Higher Than Average:
While rent to own properties are becoming more and more common, they have a few disadvantages that may affect whether or not it is a good decision. In most cases, since a portion of the rent goes towards the purchase price of the property, those who enter into rent-to-own agreements may find that rents may be considerably higher than just a straight rental. If you're looking at a rent to own situation because you want to save money, make sure that you're prepared to pay the higher premium.
The Buy Out:
In rent to own properties you are given a period of time in which a percentage of rent in your home actually goes towards the equity in the property. However, this is not a mortgage. The agreement is usually for a period of several years and gives the option to buy the property outright at the end of the lease.
This works well if you're looking to buy and you may not have enough credit to get an outright loan from the bank. Because with each monthly payment you build up equity in the property, after several years of payments you could use that equity as collateral so you can get a loan to finance the remaining balance.
The drawback to this type of agreement, however, is that if you are not able to secure the loan at the end of the lease, all the equity you've built up in the home remains with the property owner and you have lost all of your money. To make a rent to own option worthwhile, it is best if you can secure the money for the purchase of the home before the lease term is up.
Always, in mobile homes for rent to own, it is strongly advised that you have all the inspections you would get in a traditional home setting. Make sure the inspections are completed well before you sign the lease and make note of any needed adjustments in the contract. This may cost you some money ahead of time but it will certainly pay off in the end.
The answer as to whether or not a mobile homes for rent to own agreement is worth it will depend largely on your personal circumstances. There are pros and cons with regards to this kind of agreement so it's important to do your research and it may even be advisable to hire an attorney that specializes in these before you sign on the dotted line.
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