The Top 7 Benefits of Rent to Own Land Explained
If you’re like the majority of aspiring land owners, you will likely require a loan to pay for your new property. Nevertheless, to become eligible, you need a solid credit rating and finances for a down payment. And even if you’re eligible in theory, banks aren’t exactly enthusiastic to grant loans to raw land buyers. Luckily, there’s an alternative. You can significantly streamline the land buying process with the option of rent-to-own agreements. Below is a roundup of the top rent to own land benefits.
How Does the Rent-to-Own Process Work?
The rent-to-own arrangement is a real estate deal that involves a land lease which ends in a purchase. The lease is a standard rental agreement with monthly rent and other typical terms. In a rent to own contract, you would have to make a down payment in exchange for the potential future right to buy the property. Usually, the contract specifies the time after which you have the right to purchase the real property. Usually is one year at a time, with potential annual extensions.
If you do decide to buy the piece of land, your monthly payments will be split between rent and a sum that lowers the final purchase price of the property. This normally only amounts to a few hundred bucks. You are therefore viewed by the law as a tenant rather than a buyer. Until the contract completion, the landlord-owner is the person whose name is on the deed and who is in charge of paying mortgage payments.
Top Benefits of Rent-to-Own Land
With rent-to-own land, you can enjoy numerous benefits, including the following:
You can lock the price
By entering into a rent-to-own program, you can lock in today’s price of the property, with the actual purchase taking place several years in the future. This option is especially beneficial if you’re buying land in markets where property values are constantly rising.
You get to test drive the property
When you rent a property before deciding to buy it, take the time and see whether it suits your needs and vision. Also, you can learn about any issues with the land, neighborhood, and other potential problems before it’s too late.
You have time to sort everything out
Need to find a lender or builder, sell another piece of property, or prepare for a new construction loan? You can reserve the property through rent to own until you’re ready to proceed. With this agreement, you have plenty of time to sort out your affairs and start land ownership with a clean slate.
Buying is an option, not an obligation
Compared to a typical land sale agreement, a rent-to-own arrangement is less burdensome for the buyer. At the end of the arrangement, you will have the option—but not the obligation—to buy the asset. In a land sale agreement, the buyer has previously consented to a financing agreement covering the entire purchase price. If the buyer decides not to cover the amount due at the end of the contract, it’s a default and might significantly harm the buyer’s credit.
Simple methods of payment
Similarly to owner financing, a rent to own land agreement lets you pay the seller regularly. Rather than purchasing through a bank or other financial institution. You’ll pay off the land’s purchase price in installments. A percentage of the rent is put into purchasing the land in the future.
Use the land outright
You have the right to use the property fully while making payments. And when your agreement is over, you can own the property outright. This means that you’ll already be settled into the property, so you won’t have to worry about moving your belongings when the rental agreement is up.
Even though you aren’t technically generating equity while renting, your monthly payments will go toward the down payment on a house. This will boost your land equity if you decide to buy the property and become the owner.
Rent-to-Own via Land Selling Companies
The rent-to-own process is pretty simple, especially through reputable land sellers like Discount Lots. We offer the possibility to rent for all land parcels we have listed. The fact that all of our agreements are examined and approved internally makes this a viable choice even if you have a bad credit score. It takes only a few simple questions to find out whether our program is the right fit for you.
Our program ensures that the property is yours to use and enjoy, therefore we won’t sell it while your contract is in effect. And, for only one additional payment that is equal to the monthly payment during your contract duration, you can buy the property outright after your rental term has ended.
The best part is that the conditions are completely flexible — you have the right to use the property fully while making payments, can skip a payment if necessary, and even quit paying at any time without incurring any fees or damaging your credit.
A rent-to-own arrangement is a flexible option to buy cheap land for sale. It involves flexible payment options, less debt, and no issues if you have a bad credit score. Plus, you’ll have time to potentially negotiate a better deal with the owner and save money for a down payment later.
At Discount Lots, you can choose to rent any of the properties listed and start using it while you’re making payments. We don’t conduct credit checks, so having a bad score doesn’t exclude the possibility of land ownership. Plus, we offer flexible payment terms and no balloon payments, which further simplify your journey to land ownership. If you’re interested in our rent-to-own program, don’t hesitate to contact us — there are tons of options available!
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