Renting might seem like the only option when buying a home feels out of reach. But what if you could do both?
According to a recent study by Motley Fool Ascent, 79% of respondents would consider using a rent-to-own agreement to purchase a house. For many in Prescott, AZ, it offers a different approach to owning your own home.
With rent-to-own homes, you can start living in your dream house while working toward owning it, which gives you more time to build up savings or improve your credit. Sound like a win-win? Read on to explore how this flexible option could open the door to homeownership for you.
What is a Rent-to-Own Home?
A rent-to-own home allows you to rent a property with the option to buy it after a set period. The rent-to-own process gives you more time to do things like:
- Save for a down payment
- Build your credit rating
- Get financing in place
Local market trends can make it difficult for some buyers to secure a home through traditional methods. This option gives you a foothold in the market while working toward ownership.
In Arizona, rent-to-own agreements are attractive for buyers who might not qualify for a mortgage immediately but want to start living in their future home.
The Benefits of Rent-to-Own Homes
One of the main benefits of rent-to-own homes is the flexibility they provide. You can lock in a purchase price while you rent, which means you won't have to worry about losing out via rising property values.
For example, inflation-adjusted house prices have risen about 65 percent since 2000, which can make it harder for first-time buyers to keep up.
With rent-to-own, you're essentially freezing the purchase price, which gives you peace of mind as you work toward becoming a homeowner. It also gives you time to explore homeownership options without feeling rushed into a purchase.
How the Rent-to-Own Process Works in Prescott, AZ
The rent-to-own process typically starts with an agreement between you and the property owner. You agree to lease the home for a specific period, often one to three years, and part of your rent may go toward the future purchase.
These agreements can vary, so it's essential to review the terms of rent-to-own contracts closely.
Some homes may require a larger upfront option fee, which is a non-refundable payment that secures your right to buy the property. By the time your rental period ends, you should be in a position to secure financing and mortgage rates before finalizing the purchase.
A Flexible Solution for Prescott Buyers
Rent-to-own homes offer a flexible path to homeownership and give you time to build credit, save for a down payment, and lock in a future purchase price.
At PMI Northern Arizona, we provide more than just property management. We work closely with preferred lenders to help you understand your credit and explore all available financing options. Our partnerships with seasoned lenders ensure you're getting expert advice from professionals in your homeownership journey.
Contact us today to learn how we can help you take the next step toward owning your dream home.
