The term “rent to own homes” first surfaced during the 1990’s. The small lenders in a bid to find a new way to earn profit from the cash strapped consumers, came up with the idea of letting them rent a property first, with an option to buy it later.
However, as lending became easier and easier (thanks to falling rates which itself was an outcome of a growing number of lenders), the rent-to-own soon lost its appeal. And by the time the 2000’s came, it was a forgotten concept. That is, until now.
The year 2016 witnessed a renewed interest among prospective buyers regarding rent to own homes. The reason? Not one but two.
First, investors get a chance to make money off the recovering housing market. Second, consumers get to lock in on a home without having to make any big down payments or without having to avail a mortgage.
Win-win for all, right?
Like two sides to every coin, the rent to own has both benefits and drawbacks for all parties concerned. We will look at them but first, we need to understand how it all works.