There is hope for people who have not- so- good credit history as rent- to- own properties are starting to come back. They are now being offered of renting a property with an option of buying it later.
The programs were usually done by small companies and it once became a hit during the 1990s. After of only a decade, rent- to- own programs faded due to lending companies making it easier for people to become homeowners with no down payment.
Rent- to- own program gives the investors a chance to gain more profit as prices may be higher if the occupant takes more time deciding when to go from renting to purchasing the house.
Home Partners of America is one of the fastest growing companies in the U.S. that offers rent- to- own programs and it was co- founded by William Young, a former Goldman Sachs executive. Also, Sam Zell, a real- estate mogul, becomes Mr. Young's adviser. On the fourth quarter of last year, Home Partners received $500 million as an investment from BlackRock Inc.
Mr. Young saw the potential of the rent- to- own market especially for those who have bad credit history or people who simply can't afford a brand new home.
According to Mr. Young, "What really frustrates me personally is that a lot of people I grew up with, extended family members, would have trouble getting access to mortgage credit today." The longer they rent the more they will pay to acquire the house.
The program of Home Partners gives chances by buying the house and leasing it to the occupant which is completely legal if the occupant will eventually buy the house from Home Partners. This will also give them a chance to cure or mend their credit history.
According to the report, an average monthly rent on the property would start at $2,810 a month and will increase over the years up to $3,256 in their fifth year.
Home Partners also says that occupants have the freedom to choose not to purchase the house if it's more expensive than the other properties in the area. The occupants can walk away if buying a home is not their cup of tea and Home Partners will simply re- rent the houses.
