You’ve heard about Rent To Own homes in Edmonton….The Good, The Bad, and The Ugly. Today we examine if they are a legitimate or shady way of buying a house for you and your family.
If you’ve spent time driving around Edmonton Alberta or browsing Kijiji or other sites, you may have seen advertisements that read, “Own a home for $1000/month. No credit check!”
While it seems too good to be true, local rent-to-own homes are a viable option that many Edmonton residents are taking advantage of.
Are Edmonton Rent-to-Own Homes a Scam?
In any business, there are a few less-than-honorable companies who aren’t doing the right thing that end up giving everyone else a bad name. Structured correctly and explained clearly, rent-to-own or lease option home purchases aren’t a scam, but a really great way for people to get back on the path to homeownership if their current financial situation prevents them from getting a traditional home loan right now. You can find hundreds of great articles online from reputable resources that back up the fact that renting to own (also called a lease option) is a legitimate and beneficial way to work your way (back) into home ownership.
If you’re suffering from credit blemishes and want your living expenses to go towards a home purchase, a rent-to-own house purchase may be right for you.
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 at what date 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… and the buyer can feel that same sense of pride that homeowners feel because they’re working toward that goal of home ownership actively.
- 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 Edmonton Rent To Own Home / Lease Option
While rent-to-own homes in Edmonton are a valid business venture, there are many things that buyers must consider. And HERE, is where the process can break down. Both the buyer and seller must be on the same page and understand clearly, the expectations and requirements of BOTH parties.
Purchasing a home is one of the most complex financial decisions that Canadians make every year, and renting to own is no different. In some respects, it is MORE complex and there can be several potential pitfalls:
- Unlike traditional ownership, if a renter misses a payment, the entire contract *could* be voided. So make sure to read and understand all parts of the contract. Be sure and ask the property owner what the default clause is. Any reputable real estate company, like Sunrise Home Buyers will give you this info and answer any of your questions. We want you to be successful and will create a reasonable contract we believe you can fulfill.
- 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” (often called a down payment) for the rent to own agreement is usually a non-refundable fee. So be sure if you sign on the dotted line, that this home AND the timing is right for you.
- Unlike traditional rental agreements, in a rent-to-own situation, the renter is responsible for most repairs, maintenance, and upkeep of the home.
Some Advantages of Renting To Own A Local Edmonton Alberta Home
While renting to own is not without risk (and no financial decision is risk-free), there are a ton of advantages:
- Buyers can “check out” the neighborhood before committing to a lengthy mortgage.
- Families can move in quickly and enroll children in the local school district.
- Buyers with credit problems and bruised credit will have time to get their financial situation in order.
- The seller has a tenant who has the motivation to keep the property in good condition.
- The seller will receive monthly payments, which can cover mortgage payments.
- The seller of the home is exposed to a larger potential market by including those without perfect credit.
All things considered, not only is renting to own a home in Edmonton is definitely not a scam but a legitimate option for both buyers and sellers. If you want more information on renting to own a Edmonton house, the process, and our available list of local Edmonton rent to own houses/lease options, click the big link below.
At Sunrise Home Buyers we believe integrity is key. While unexpected events happen, we won’t do a rent to own purchase or sale if we feel a buyer will not be successful. We have many rent to own opportunities come our way because we buy houses in Edmonton on a regular basis. Please read the reviews of people we have worked with to get a sense of who we are and what we are about.
If you’d like to learn more about a buying a Rent To Own home in Edmonton, Alberta read another one of our articles entitled, Rent to Own Home Scams in Edmonton, Alberta – How to Avoid Disaster OR How Do Rent To Own Homes Work In Edmonton?
Or if you are approaching the Edmonton Rent to Own process from the other side, you actually OWN THE PROPERTY, you may want to read about 5 Tips For Selling Your House in Edmonton, Alberta Using A Rent To Own Contract!