WE SPECIALIZE IN OWNER FINANCED HOMES IN MINNESOTA & WISCONSIN
Rent to own or lease Option- arrangement, the seller is giving you the right – at some point in the future – to buy the house at a price that is agreed upon today.
Usually, a portion of your rent over a specified lease period goes toward your eventual down payment. Typically, a Minnesota tenant would pay slightly above-market rent over the lease period, usually from one to Five years, for the right to enter into this arrangement. It”s also common for the tenant in Minnesota or western Wisconsin to pay a fee in “option money,” or for the privilege of having the option.
For example, if a house in Minnesota would typically rent for $1,500, you might be asked to pay $1,800 per month, a portion of which — say $300 — would be credited to your eventual down payment, depending on the contract you work out. Such an option usually expires at the end of the lease. In other words you must exercise the option before the lease expires.
But be careful. In some lease-purchase agreements, you are contractually obliged to buy at the end of the lease. Minnesota Sellers and agents now often use the two terms interchangeably. But whatever name they attach to the arrangement, make sure you have the option.
The arrangement gives you more time to think about the deal plus provides a built-in structure to save for your down payment. It also allows you to discover any flaws in the home that may not have been detectable on an inspection and to get a feel for the neighborhood without committing to a long-term mortgage.
In Minnesota areas where real estate values are quickly rising, locking in a purchase price on the day you sign the initial rent-to-own contract could be very profitable for you. If appreciation is significant during your lease portion, You will come out way ahead. The problem with this theory is that good lease-to-own deals are generally scarce in hot sellers markets. If a seller sees rapid appreciation, there is no motivation to agree to sell at today’s price a year -five years later. Only Minnesota owners who’ve had their properties on the market a while, or had to move away quickly and are struggling with two house payments, are likely to agree to a lease-purchase arrangement.
Another potential disadvantage is that you may be obligated to tend to repairs and maintenance throughout your lease stage, instead of the landlord. Under most lease-to-buy contracts, any money or sweat equity you put into major improvements will not be reimbursed in the event you eventually opt out.
Where do you find Minnesota or Western Wisconsin rent-to-buys? Most real estate sales agents and real estate rental agents have listings. Also, try an Internet search under ” MN rent-to-own homes ” followed by your city’s name-Neighborhood-school district.Or, if you see a rental home that you really like, just ask the leasing agent if the owner might be agreeable to a Mn rent-to-own arrangement.
Contract for deed homes –in Wisconsin there are know as land contracts option to puchase agreements.
Mn home buyers need around 10% down of the sale price to enter into a contract for deed.
Rent to own the home renter will need around 5% down usually for the sellers to offer rent to buy financing.
Contract for deed Real Estate can be tricky make sure you use a knowledgeable Real Estate Broker when Buying or selling a house on a cd.
Related rent to own links
BOARDWALK PREMIER REALTY INC
Steve Vennemann (651-334-8312) BROKER