Rent To Own Homes in Fort Collins (real estate, lease)

[nevada1427]

We were curious to find out if anybody on this forum has entered into a Rent to Own contract. We are clueless as to how it works. Is it worth it? What are the pros and cons? Any information provided is greatly appreciated.

[James Orr]

I am a real estate broker in Fort Collins, Colorado and one of my areas of focus is working with buyers that need to do creative transactions like rent to own (which is really just a lease with an option to buy or a lease with a purchase contract), owner financing, wrap financing and other strategies that give you time to improve your credit, financial or work situation before you get a new traditional bank loan.

If you can do a traditional purchase transaction, in the overwhelming majority of the cases, it is better to do that than to do something creative like some of the ones I mentioned above, but there are some advantages to buying creatively. One is the ability to capture possible appreciation by locking in a price now.

On average, since 1990, Fort Collins home prices have gone up about 8.42% per year. Of course, the last couple of years we have not seen that, but over the last 21 years that's what it has been. If the home values go up the average rate we've seen over 21 years than a $200,000 home today will cost you about $217,000 in a year and over $250,000 in three years just by waiting. So, getting a home on a rent to own with an appreciating market (especially based on the average appreciate rate we've seen) can make a huge positive difference for you financially.

The downside of rent to own versus some of the other creative ways to buy without a new bank loan is that you are renting the property and not really an owner at all. With other methods like owner financing and wrap financing you actually own the property and the seller is agreeing to accept payments (like a bank would if they were to loan you the money to buy).

I do teach hour long workshops locally here in Fort Collins on these strategiesd, work with buyers as their real estate broker to buy homes like this and run a national non-profit that teaches this to people in all US cities. [ mod cut ]
Sincerely,

James