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Rent To Own Housing: A Growing Trend or Phase?

Rent to Own Housing: A Growing Trend or Phase?

Rent to ownThe economy is making a comeback but at agreeably slow rates; so is it really making a comeback? The construction industry slowly inching back into gear and new houses are being constructed in various parts of the country, but at a slow pace. Home sales are up because of the drop in prices which has sent the demand graph going upwards. In such a market scenario, the rate of foreclosures which was up is now coming down. In the coming year, the market for real estate is expected to remain uncertain. This is pretty much in line with America’s financial future.

The states that manage their budgets better and have lower taxes enjoy a much better economy. Look at Texas and Florida where the rate of unemployment is low and the pursuit to create jobs for the people actually exists. On the other hand, states such as New York, Illinois, and California are on the verge of bankruptcy. The cost of real estate is high because of lack of new homes to live in and so are unemployment rates. But economic conditions are improving slightly throughout America but not enough for the amount of people that are entering the work force from college, foreigners, and layoffs.

Following the Recent Housing Data

Most property investors are playing a wait and watch game while others are able to buy property in bulk which is mostly foreclosed or HUD. To small investors who want to buy a single family house the housing markets seem uncertain at the moment. More single families are choosing rent to own homes since it is a more sensible option, as the numbers to show for many people. A lot of people are positive about a change in the real estate market but some who are more realistic are remaining on the cautious side for three main reasons. First, the tax cuts introduced by the Bush administration are going to expire in 2013, most likely, which means taxes will be higher for everyone and everyone will be paying higher taxes because of the new health care mandate that is about to be imposed on American citizens.

A Logical Conclusion

The second reason involves GDP growth, which predicted by the Obama administration, is not high enough for a decent recovery. In fact, the economy is sluggish and some of this is due to cuts in expenditures which really need to be cut a lot more. The final reason relates to U.S. foreignand public debt which is still increasing with no signs of a remedy in 2013. All this only means that you should be cautious when it comes to making an investment in a property. In 2013, to stay on the safe side, you should strongly lean towards a rent to own housing program.

What Has Caused Rent to Own Housing to Surge?

Anthony DeSales is a housing purchase consultant. In his capacity with leading rent to own housing serviceHomeStarSearch makes optimistic predictions for 2013; he posits that it will be a surging fiscal year for rent to own housing market. “Real estate costs will go up by 1% in the first quarter of 2013 and almost 3.15% in the second quarter. This makes the market a sellers’ market.” When prospective buyers become tired of waiting and watching the market situation, their best option is a rent to own property since they can easily abandon it when they see a house that is suitable for them to own. In this market, this may require some patience. They are not bogged down in a home they really did not want and possibly in an area that is not befitting to them.

Is It a Smart Move for Consumers or Simply a Smokescreen?

A lease to own housing involves a lease that gives you an option to buy the property within a specific period at a mutually agreed upon price. The market for such lease programs is growing fast as it always has been in any post-crisis market. Though with the onset of higher taxes, America may not be out of the woods yet and even if the worst is over with, America could be growing at a much higher rate but because of self-imposed taxes and regulations, America is not impressing the world like it used to and should be, according to many real estate and financial pundits.

A Real Estate or Home Owner Savior?

Most home buyers are not able to meet the tough loan prerequisite requirements of banks and other financial institutions. The sellers are also unable to sell their homes for what they believe they should be worth. They have an option to sell their homes via a rent to own program.

 

Jared Diamond

 

The following article iwas a guest post from Jared Diamond who writes on a multitude of personal finance and economic topics. He enjoys sharing insights with broad audiences. Jared serves in a consultancy role with a dynamic set of personal finance companies. The views expressed in this article are those of Jared Diamond and do not necessarily reflect the views of Bill Gassett the owner of this blog.

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About the author: The above Real Estate information on rent to own housing was provided by BillRE/MAX Executive Realty Hopkinton Mass Real Estate Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 25+ Years.

Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!

For Metrowest Massachusetts Real Estate and home sales see Maximum Real Estate Exposure

I service the following towns in Metrowest MA: Framingham, Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Franklin, Grafton, Northboro, Shrewsbury, Bellingham, Northbridge, Uxbridge, Sutton, Millbury, Worcester, Millville, Douglas, Natick and Wayland MA.

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Comment balloon 6 commentsBill Gassett • January 07 2013 05:47PM

Comments

How nice to let Jared share this information on your blog. trends seem to change as the market does. That's for sure!
Posted by Melissa Zavala, Broker, Escondido Real Estate, San Diego County (Broadpoint Properties) almost 6 years ago

Bill buyers have to be careful when they enter into a Rent/Lease to Purchase agreement if they will be applying for financing to purchase the property.  Buyers and Sellers will many times try to incorporate a provision in the agreement for the seller to contribute towards the downpayment at the time of the sale.  The buyers needs to talk to a Lender before doing that because the seller will be only be able to contribute the amount that that buyer paid in rent that was over & above the fair market rent for the same size unit in the area.  If the buyer only paid fair market rent, then the seller can not contribute any money towards downpayment, the seller will only be able to contribute towards the closing costs like any other seller.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 6 years ago

Great point George! Thanks for mentioning that.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 6 years ago

We're seeing less and less of this scenario here--thankfully!  Our tax rates are incredibly low but, rental rates are 53% HIGHER than mortgage payments now!  So, renting-to-own has, in the past 12-14 months, gone to BUY!  Now we have little to no inventory and buyers chomping at the bit to find a home.  It's insane how the market turned--seemingly overnight!

Posted by Debe Maxwell, CRS, Charlotte Homes for Sale - Charlotte Neighborhoods (www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310) almost 6 years ago
Hello Bill, great insight on this article that talks about rent to own housing. Hope many of your avid readers were able to find this article helpful. Thank you for sharing and keep up the good work.
Posted by Katerina Gasset, Get It Done For Me Virtual Services (Get It Done For Me Virtual Services ) over 5 years ago
Well written article you have here Bill that talks about rent to own housing. Thank you for a great share Bill and keep it up.
Posted by Petra Norris, Realtor, Lakeland FL Homes for Sale (Lakeland Real Estate Group, Inc.) over 5 years ago

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