Home Rent to Own | Power of Sale/Foreclosure | Credit Management Do You Want To Become A New Homeowner Or Stop Fore | Page 4

Advantages and Disadvantages of
Rent to Own a Home
 Advantages or Disadvantages for Real Estate Investor
• Advantages
• The house is something more desirable than the average apartment, they end up in a
position to charge at a high rate for rental fees.
• Since a specific percentage of the monthly payment is going into the pocket of the seller,
the investor will also receive a handsome profit, especially once the house is sold.
• If the tenant chooses the option-to-purchase consideration, the fee of the deposit can be
collected up front. If the tenant fails to purchase the home at the end of the term, they
will lose their deposit to the landlord.
• If the contact is made on a lease-purchase or the tenant wants to buy the property, the
seller will earn from the rental and also retains the money but his house will be sold
officially.
• Disadvantages
• Rather putting the property on the sale right away, the seller has to undergo tenant
screening processes such as credit and background checks.
• If the contract is made on the basis of option-to-purchase, the renter is not bound to
purchase the property at the end of the term. The deal can be terminated anytime when
the rental agreement expires. In this case, the seller has to find another renter and go
through the screening process again.