Just Some Important Information about Rent to Own and Owner Financing
In today’s real estate investing industry, the two terms that are being used by the people who are comprising this particular industry are owner finance and rent to own. These two terms are actually ways or methods that are recognized as both well-paid or advantageous and unconventional at the same time, and such are typically being used for the acts of investment property financing and home financing. The term owner financing can also be called as seller financing, and it is basically referring to a specific transaction that allows or enables the buyers to purchase or buy the house property in an outright manner without the undergoing a banking system; while the rent to own is actually referring to a specific transaction that is providing the buyers of the property to try or test-drive it first before deciding to completely purchase it.
For clarification purposes, the term rent to own is actually a certain type of documented transaction that is legally practiced and made for payment in a weekly or monthly basis and they have this privilege to purchase the property immediately, and some of the inclusions for this transaction include the consumer electronics, real property, home appliances, motor vehicles, and furniture. Rent to own can also be called as rent to buy and rental purchase; the owner financing, on the other hand, can also be called as seller financing and this term is also defined as an arrangement that is contractual and may vary depending on the circumstances, and some of the common contents of the arrangement include the schedule of payments, the interest rate, and the purchase price. The owner finance option is recognized as the easiest to understand financing option in the real estate industry and it means that the buyer will be the formal owner of the property while he or she is still making payments on it; while the rent to own option is giving the buyer a chance at new real estate markets.
The individual who wants to try their fate and luck in the industry of real estate investing should first familiarize themselves about these two options and erase or delete the option of using the traditional mortgages. Some of the common similarities between the rent to own and owner finance include the fact that it is letting the buyers own the residential property regardless of their credit status, they are also the best option in real estate or home financing, and lastly, the two financing options can also help the buyers to secure their financial standing in the future.