As creative real estate strategies are becoming more and more popular, many people are looking to rent to own houses as the stepping stone to becoming a home owner. Sadly, the reality is that most people who get into a rent to own home never actually end up a homeowner. This means that they literally have thrown away their option fee as well as the monthly rent credit. The good news is that you can be successful with rent to own – you just have to know how! Let’s take a look at some strategies that you can implement to insure your success.
The Correct Contract Terms
One reason that many tenant buyers never get a mortgage is that the contract terms have set you up to fail from the beginning. This can be because you are working with a real estate investor whose business model is collecting option fees from people with bad credit who will never actually purchase the home. Or, it can simply be that you are working directly with the home owner and neither of you understand what you need to do. One of the biggest mistakes made is setting up a term that so short that they do not have the time to get their credit in order. The reality is that unless you are just a few points away from getting a mortgage, you probably need a contract term of at least two years.
Credit Repair
Repairing credit report issues has to be your top priority. If you are not willing to approach this seriously, you are better off renting. Even if you do have a term of two years, you need to begin right away. It is best to develop a through credit restoration plan rather than simply hiring a credit repair company. Your plan should include developing good new credit.
