Learn the Difference between Rent to Own and Owner Finance
In the industry of real estate investments, there are actually two terms that are commonly being used by the people especially when it comes to residential or house properties, and these two terms are rent to own and owner financing. Rent to own and owner-financing are terms that refer to the unconventional but well-paid ways or methods on how a person may purchase a property, and these two terms are included in the acts of home financing and investment property financing. The definition of the term rent to own is referring to the transaction that provides the buyers of the real estate property to test-drive or try out the property first before purchasing or buying it completely; while the term owner financing which can also be called as seller financing is referring to the transaction that allows the buyers to purchase or buy the real estate property outright without going through a banking system.
A clearer definition about the term rent to own, it is actually a certain kind of transaction that is documented in a legal manner with the options provided that the individual may pay the owner weekly or monthly and may purchase it anytime they want, and the individual who rented the property can also use and own the motor vehicles, consumer electronics, home appliances, and furniture within the property. The seller financing or owner financing, on the other hand, is referring to the arrangement that is contractual and the terms, which include the interest rate, purchase price and schedule of payments, may vary and depends on the circumstances. 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. The rent to own and owner financing may be different but they also have similarities, such as the fact that these two options can actually help the buyers to secure their financial status or standings in the future, these two options are also letting the buyers purchase and own the residential or home property regardless or despite their credit standing or level, and these options is also recognized as the two best options for real estate investing and home financing.