Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

Anyone know anything about rent to buy?

Anyone know anything about rent to buy?

Old Dec 14th 2005, 3:34 pm
  #1  
bright spark
Guest
 
Posts: n/a
Default Anyone know anything about rent to buy?

Hi!

A friend has just moved from Newcastle to Tampa, Florida. House prices are much higher than she expected and their realtor has pointed them in the direction of "rent to buy".

For a small depost, they rent for one year, part of the deposit and part of the rent goes towards purchase price (which is fixed from the satrt) then when the 12 months is up they should be able to get a mortgage to buy it out right.

Anyone have any experience of this or know of any pros ot cons?

Thanks!
 
Old Dec 14th 2005, 3:49 pm
  #2  
Septicity
 
fatbrit's Avatar
 
Joined: May 2004
Posts: 23,762
fatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond repute
Default Re: Anyone know anything about rent to buy?

Pros: If you haven't got any credit or deposit, it's certainly a way in.
Cons: You don't have much protection if anything goes wrong. If it's a seller-financed rent-to-own, the terms are usually very much in favour of the seller and you can lose all at the drop of a hat; if it's creative financing from a company, beware of drastic prepayment penalties when you are in a position to refinance back to the conventional world. Remember that these deals are most commonly aimed at the bottom rungs of society and have an Arfur Daley type ring to them.

Also, friend needs to work on building up good credit score in next couple of years with at least 4 mixed lines so that they do not need to take this type of deal again
fatbrit is offline  
Old Dec 14th 2005, 4:13 pm
  #3  
bright spark
Guest
 
Posts: n/a
Default Re: Anyone know anything about rent to buy?

Thanks for your reply,

strange thing is....this is $330K house in a new, gated community....maybe it's the builders trying to offload an inventory house?

Bright Spark.
 
Old Dec 14th 2005, 4:13 pm
  #4  
Mr. Grumpy
 
Joined: Jun 2003
Location: Nashville, TN
Posts: 3,100
BritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond repute
Default Re: Anyone know anything about rent to buy?

Originally Posted by bright spark
Hi!

A friend has just moved from Newcastle to Tampa, Florida. House prices are much higher than she expected and their realtor has pointed them in the direction of "rent to buy".

For a small depost, they rent for one year, part of the deposit and part of the rent goes towards purchase price (which is fixed from the satrt) then when the 12 months is up they should be able to get a mortgage to buy it out right.

Anyone have any experience of this or know of any pros ot cons?

Thanks!
If they work hard on theiur credit this is an OK way to go - 'carrying the note' can be popular for investors, but can be risky for buyers if they do not check everything out thoroughly
BritGuyTN is offline  
Old Dec 14th 2005, 4:25 pm
  #5  
bright spark
Guest
 
Posts: n/a
Default Re: Anyone know anything about rent to buy?

I believe they are poised to move straight in, within the next few days. Do you think this is wise without a home inspection or will this come when they want to buy it?
 
Old Dec 14th 2005, 4:35 pm
  #6  
Septicity
 
fatbrit's Avatar
 
Joined: May 2004
Posts: 23,762
fatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond repute
Default Re: Anyone know anything about rent to buy?

Originally Posted by bright spark
I believe they are poised to move straight in, within the next few days. Do you think this is wise without a home inspection or will this come when they want to buy it?

The best home inspections for a new build start when they pour the foundation and should be at every stage before stuff is encased to hide it! Too late, of course, on a spec home. They should have it thoroughly inspected by an experienced and independent inspector (local builders often have a lot of influence!) ASAP.

Also, is the realtor theirs (i.e. owes a fiduciary duty) or the builders? They need to go through the paperwork, which will be at least an inch thick, to find what they are letting themselves in for BEFORE they sign it. It will be too late at actual signing time! What are the actual conditions and the penalties. The realtor should explain this, but is likely to gloss over the cons if working for the builder.

Caveat emptor! Trust nobody! Check and double check! Far more so than you ever would back in Blighty. Otherwise, life is going to be expensive.
fatbrit is offline  
Old Dec 14th 2005, 4:40 pm
  #7  
Mr. Grumpy
 
Joined: Jun 2003
Location: Nashville, TN
Posts: 3,100
BritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond repute
Default Re: Anyone know anything about rent to buy?

Originally Posted by fatbrit
Caveat emptor! Trust nobody! Check and double check! Far more so than you ever would back in Blighty. Otherwise, life is going to be expensive.

This sums up most apects of life in the USA - you are on your own.

If on large transactions you go in with the attitude people are trying to screw you (and you do your due dilligence) and make all small transactions on AMEX then you should be fine

sad but true
BritGuyTN is offline  
Old Dec 14th 2005, 5:03 pm
  #8  
bright spark
Guest
 
Posts: n/a
Default Re: Anyone know anything about rent to buy?

Thanks for your replies, I will pass the info on.

Bright Spark
 
Old Dec 14th 2005, 5:38 pm
  #9  
Lost in BE Cyberspace
 
Boiler's Avatar
 
Joined: Mar 2004
Location: Colorado
Posts: 33,378
Boiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond repute
Default Re: Anyone know anything about rent to buy?

Originally Posted by bright spark
Hi!

A friend has just moved from Newcastle to Tampa, Florida. House prices are much higher than she expected and their realtor has pointed them in the direction of "rent to buy".

For a small depost, they rent for one year, part of the deposit and part of the rent goes towards purchase price (which is fixed from the satrt) then when the 12 months is up they should be able to get a mortgage to buy it out right.

Anyone have any experience of this or know of any pros ot cons?

Thanks!
I do, well a friend is involved in these deals.

But I have to go, quickly a last resort if you have no other options.
Boiler is offline  
Old Dec 14th 2005, 6:16 pm
  #10  
Ray
 
Ray's Avatar
 
Joined: Mar 2003
Posts: 68,280
Ray has a reputation beyond reputeRay has a reputation beyond reputeRay has a reputation beyond reputeRay has a reputation beyond reputeRay has a reputation beyond reputeRay has a reputation beyond reputeRay has a reputation beyond reputeRay has a reputation beyond reputeRay has a reputation beyond reputeRay has a reputation beyond reputeRay has a reputation beyond repute
Default Re: Anyone know anything about rent to buy?

Good deal for the realtor there..
Always have a home inspection..
Gated communities ..one of the finest overpriced scams ..

Should have got a mortgage while they were still living in the UK
no problems then ..
Ray is offline  
Old Dec 14th 2005, 7:52 pm
  #11  
bright spark
Guest
 
Posts: n/a
Default Re: Anyone know anything about rent to buy?

I think the downpayment was their only problem, but yeah, maybe a mortgage could have been sorted before they left the UK....
 
Old Dec 14th 2005, 8:42 pm
  #12  
my arm aches
 
ladyofthelake's Avatar
 
Joined: Jul 2003
Location: the warm waters of Florida
Posts: 2,289
ladyofthelake has a reputation beyond reputeladyofthelake has a reputation beyond reputeladyofthelake has a reputation beyond reputeladyofthelake has a reputation beyond reputeladyofthelake has a reputation beyond reputeladyofthelake has a reputation beyond reputeladyofthelake has a reputation beyond reputeladyofthelake has a reputation beyond reputeladyofthelake has a reputation beyond reputeladyofthelake has a reputation beyond reputeladyofthelake has a reputation beyond repute
Default Re: Anyone know anything about rent to buy?

Originally Posted by bright spark
Thanks for your reply,

strange thing is....this is $330K house in a new, gated community....maybe it's the builders trying to offload an inventory house?

Bright Spark.
If prices are higher than expected, why are they buying such an expensive house? There are certainly cheaper new homes around that.
Renting until they have a decent deposit saved could be another option, then when the time comes to buy, the choices are not so restricted.
ladyofthelake is offline  
Old Dec 14th 2005, 9:07 pm
  #13  
Mr. Grumpy
 
Joined: Jun 2003
Location: Nashville, TN
Posts: 3,100
BritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond repute
Default Re: Anyone know anything about rent to buy?

Originally Posted by ladyofthelake
If prices are higher than expected, why are they buying such an expensive house? There are certainly cheaper new homes around that.
Renting until they have a decent deposit saved could be another option, then when the time comes to buy, the choices are not so restricted.
I think renting for a year, saving a deposit and building a credit history are very good options - this is what i would recommend in most cases
BritGuyTN is offline  
Old Dec 14th 2005, 9:12 pm
  #14  
Septicity
 
fatbrit's Avatar
 
Joined: May 2004
Posts: 23,762
fatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond reputefatbrit has a reputation beyond repute
Default Re: Anyone know anything about rent to buy?

Originally Posted by BritGuyTN
I think renting for a year, saving a deposit and building a credit history are very good options - this is what i would recommend in most cases

I concur. The main exception would be if you believed that prices (or possibly interest rates) were going to rise v. rapidly in the short term. But we've just had that, haven't we?
fatbrit is offline  
Old Dec 14th 2005, 9:54 pm
  #15  
Mr. Grumpy
 
Joined: Jun 2003
Location: Nashville, TN
Posts: 3,100
BritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond reputeBritGuyTN has a reputation beyond repute
Default Re: Anyone know anything about rent to buy?

Originally Posted by fatbrit
I concur. The main exception would be if you believed that prices (or possibly interest rates) were going to rise v. rapidly in the short term. But we've just had that, haven't we?

Yeah - I think that interest rates are only going to maybe go up another .75% (if that)

House price appreciation, however - I have no idea about
BritGuyTN is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.