Is Doing a Rent to Own a Good Idea 
in Utah?

When is rent to own a good idea 
and when is it better to just rent or purchase in Utah?

Is Rent to Own or Lease Option (Lease with Option to Purchase) a good idea in Utah? Is it legit? How do I know I won't get scammed? When is it better to do a lease option rather than a traditional purchase? You'll get the answer to these questions and more!

Is rent to own legit? Rent to own is totally legal. It is how the rent to own deal is structured that gets people into trouble sometimes. It is always a good to have an agent work for you and help you write up a contract that protects you as the buyer/tenant. If you choose not to have a real estate agent work for you, you can always hire a lawyer to help you with a contract, although a lawyer may be pricier than a real estate and they can't help you search for homes. It is actually free to hire a buyer's real estate agent although they may sometimes charge you a broker's fee (which goes to the broker, not the agent). The real estate agent gets their commission from the seller.

How do I know I won't get scammed? It is always best to get a real estate agent to represent you when doing a rent to own contract. But, if you can't get a good agent who knows how to do a rent to own, at the very minimum, set up the rent payments through a loan processing company. The company will pay any underlying mortgage, track payments and rent credit, etc. This will ensure there is a paper trail of all payments. You will also want to set up an account with a title company and run title on the subject property. Last thing you want to do is purchase a rent to own and realize the sellers don't actually own the property. If you have a good real estate agent working for you, they will take care of all of these details for you!

When is it better to do a lease option rather than a traditional purchase? It depends on your current circumstances and on the current housing market as well. What are your circumstances? Is your credit not allowing for you to qualify for traditional financing? Are you going through a divorce and you don't want to purchase anything before the divorce is finalized? Do you not make enough money but have a settlement coming? Are you showing more debt than is allowed for a loan but have sufficient funds to carry the loan? Is the housing market on a downturn and loans are hard to come by or interest rates are really high? If you're in any of these situations, it may be worthwhile to speak to a real estate agent about doing a lease option.

A few advantages of doing a rent to own include:

1. Less Closing Costs

2. Quicker Move In

3. No Credit Check

4. Home Does Not Show Up As Debt

5. Lock Down Purchase Price

6. Gain Monthly Equity

A few disadvantages of doing a rent to own include:

1. Home Not in Your Name so No Tax Advantages

2. Gain Less Equity Than Traditional Purchase

3. Higher Monthly Payments than Traditional Purchase

4. Non-refundable Down Payment (often higher than a traditional purchase depending on loan product)

5. Less Inventory to Choose From

If you want help with purchasing a rent to own or a lease option in Utah, we are here to help!

https://rent2ownutahhomes.com/pages/3552/How-Rent-to-Own-Works

Brokerage Services Provided by Integra Realty