Pros And Cons Of Rent-To-Own Housing In Albuquerque

Pros And Cons Of Rent-To-Ownth-3

Traditional methods of purchasing a home are becoming less common than decades past.  The American Dream has changed a bit.

As banks become tighter with their loan approval process and Americans are still digging out of the recession (and possibly credit problems they may have fell into), many are turning to alternative means of purchasing a home.

Renting apartments and houses has increased dramatically in recent years… and renting to own a house (or Lease Option as many people call it) has become a popular way for families to buy a local Albuquerque house directly from a seller (after a rental period that usually lasts 12-24 months), without the stringent qualification process offered by banks.

There are many pros and cons of rent-to-own housing in Albuquerque, which we will outline in this article.

Remember to read each detail of any contract that you sign, and consult with a financial advisor or rent-to-own expert if you have any questions, or any part of the process is confusing to you.

Pros of Ren-To-Own Housing in Albuquerque – Why It Can Be Great

Easier Qualification

The largest hurdle to home ownership is usually qualifying for a loan for the house.

Lenders have become more and more stringent with income and asset requirements to approve a loan since the recession, and with the current state of the economy, many Americans just cannot meet these unrealistic expectations. In a rent-to-own situation, the seller can determine the guidelines of approving the contract, and is often much more reasonable than traditional banks.

And this means that usually there’s a much lower upfront payment to get into the house… and you don’t have to go through the rigors of a bank qualifying.

Time to Improve Your Credit

As you’re renting to own a home, you have an opportunity (usually 1-5 years) to rebuild your credit rating so you can get a home loan to buy that house at the end of the rent-to-own / lease option agreement.

While working on your credit, you’ll have the opportunity to live in your future home, and when the term has ended, you’ll have saved both a down payment and hopefully increased your credit rating to get a traditional mortgage from a bank.

Cons of Rent-To-Own Housing – Some Drawbacks

Rent Can be More Costly

In a rent-to-own situation, including here in Albuquerque and all around New Mexico, the seller can charge more for monthly rental since it comes with the option to purchase the house. If a buyer is unable to purchase the home at the end of the term, they will have spent more to live in a home without the benefit of purchasing it.

So you need to be sure that you’re serious about potentially purchasing this house at the end of the rent-to-own agreement… otherwise you’d be better off just renting a house through the normal rental channels.

Lease Cancellation

Buyers must beware the risks involved with lease cancellation, eviction, and other factors when considering a rent-to-own home. If a buyer is late on payments or breaks the lease in any way, the option to purchase the home may be lost, and they will have forfeited all fees and additional rent they’ve paid for the ability to purchase at the end of the term.

So same goes here as in the first drawback… if you’re wanting to rent-to-own the house… be serious about it and use this as an opportunity to improve your credit and earn your way into a great house you’d love to own.

For many Albuquerque residents who can’t get a traditional bank loan to buy a house… the Pros and Cons of Rent- To-Own Housing In Albuquerque clear cut.

If you don’t have the credit or don’t have a huge downpayment… but want to experience the feeling of “ownership” while you work on purchasing that house… looking for great rent-to own-houses in Albuquerque is a great route.

If you’re not fully committed to improving your financial situation, your credit, etc… doing a rent-to-own may not be the right fit.

Rent-to-own is an attractive option for many Americans. By knowing what you’re getting into, you have a prime opportunity to buy your dream home without meeting the often unrealistic standards set by traditional mortgage lenders.

Have Questions On How Our Local Rent-To-Own Program Works?

If you have questions about the rent-to-own / lease option process works… we’re here for ya!

Just click the link below to see our available properties… or connect with us by calling us at 505.404.1131 or through our contact page on this website.

Have Questions? Call us today at 505.404.1131.

 See our available Albuquerque area rent-to-own houses here >>

About The Author

Robb Krautbauer

Owner and CEO of Mountatin View Investors, Inc. Robb has executed over 75 commercial real estate deals since 2011. In this time, he has raised over $3mm, with a transaction volume of over $40mm.

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