Rent-to-own home leases becoming more popular
In South Florida’s depressed housing market, some people are taking a wait-and-see approach by renting with an option to buy later.
Leasing is still more common with cars, but the concept is spreading. Sellers are willing because they’re struggling to unload their properties, and a rent-to-own contract brings in cash. Prospective buyers also are game because credit is tight, and they can build equity while they take time to qualify for mortgages.
“With the economy, I think we’re going to see this all through ’09, unfortunately,” said Perry Diamond, a Boca Raton real estate agent with Lang Realty who sets up most of his residential listings as leases to own.
In a typical deal, the renter agrees to buy the property for a specific price at a later date. The renter makes a nonrefundable deposit, and the seller puts part of the rent money toward the down payment. Still, there are risks for both sides.