Exploring Different Rent to Own Options

During the pandemic, many Denver renters contemplated ditching the rental lifestyle and putting down roots in a larger house in the suburbs. But that’s not the case for everyone. During this time, many renters were content with their space or location but wanted the security of owning their property. For people in this group, renting or leasing to own a house or condo could be an ideal way to break into homeownership. Let’s look at a few different scenarios.

The rent-to-own model involves a tenant who signs a rental agreement or lease that has an option to buy the house or condo later — generally within three years. The renter’s monthly payments will include rent payments and additional payments that will go towards a down payment for purchasing the home. The lease contract will state the tenant’s rental payment, how much of the rental payments accrue toward a down payment, and how much the purchase price of the home will be.

Lease-purchase vs. lease-option
These concepts may sound similar, but there’s one very big difference: one is a requirement, and the other is a choice. A lease-purchase legally binds you to purchasing the home once the lease is up, whereas a lease-option gives you the opportunity to buy the house before the lease is up.

What do you need to do to prepare?
Before you sign a rent-to-own lease from your landlord/seller, you should get pre-approved for a mortgage at the purchase price stated in the contract or lease to ensure you can afford the home.

Depending on your situation and long-term goals, renting to own may be a great choice for you. But there’s only one way to find out – get an experienced pro on your side who can help answer the questions you may have. Metrowest has several rent-to-own options and can help you start the process!

Ken Blevins

Ken Blevins, CEO of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 24 years of experience in collections, foreclosure/bankruptcy, loss mitigation and real estate disposition (REO). Blevins was an original co-founder of Metrowest in 2003, a Real Estate Brokerage and Services Company focused on the resale, recovery and liquidation of distressed real estate in Denver, Colorado and surrounding metros. Blevins assumed the role of CEO in January 2014 and provides strategic direction and has management accountability for the day-to-day operations. Under his direction, Blevins drives all default management operations to maximize asset value recovery and reduce loss severity through a strategy focused on customer service and state of the art technology. Blevins has 18 years of direct operational experience in all facets of REO Asset Management having managed large national REO Disposition contracts for Fannie Mae, Freddie Mac, Wells Fargo, JP Morgan Chase, CitiFinancial, GMAC Mortgage and other various financial institutions. Blevins specialties include REO asset management, real estate investment, bulk REO acquisitions and distressed asset recovery and liquidation, and he has directed the resolution and liquidation of over ten billion in institutionally-owned residential real estate.

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