If you’ve spent time driving around Chicago IL or browsing Craigslist or other sites, you may have seen advertisements that read, “Own a home for $500/month. No credit check!”
While it seems too good to be true, local rent-to-own homes are a viable option that many Chicago residents are taking advantage of.
Are Chicago Rent-to-Own Homes a Scam?
In any business there are a few hucksters who aren’t doing the right thing that give everyone else a bad name. But renting to own / lease option homes aren’t a scam and they’re a really great way for people get on the path to home ownership if your financial situation prevents you from getting a home loan right now. You can find hundreds of great articles online from reputable resources that back up the fact that rent to own (also called a lease option by many people) is a legitimate and great way to work your way into home ownership.
Really the rent to own process is a relatively simple concept:
- The buyer and seller come to an agreement on the cost of the home, the monthly rental payment, and how long the buyer will have to purchase the home.
- The buyer moves into the home and begins paying rent. As this is going on, the buyer is working to rebuild his or her credit, or possibly secure financing to purchase the home using traditional means… and the buyer can feel that same sense of pride that home owners feel because they’re working toward that goal of home ownership actively.
- At the end of the term, the buyer has the option to buy the home at the price agreed upon in the initial agreement.
Things To Consider With Your Chicago Rent To Own Home / Lease Option
While rent-to-own homes in Chicago are a valid business venture, there are many things that buyers must consider.
Purchasing a home is one of the most complex financial decisions that Americans make every year, and renting to own is no different. There are several potential pitfalls:
- Unlike traditional ownership, if a renter misses a payment, the entire contract *could* be voided. So make sure to read the fine print and ask the property owner what the default clause is. Any reputable real estate company, like Chicago Home Buyers will give you this info and answer any of your questions.
- If you decide not to purchase the home, or are unable to secure financing, any “credit” (if applicable) you may have earned will likely be lost
- The upfront “option fee” for the rent to own agreement is usually a non-refundable fee. So be sure if you sign on the dotted line, that this home is the right one for you.
- Unlike traditional rental agreements, in a rent-to-own situation, the renter is responsible for most repairs.
Some Advantages of Renting To Own A Local Chicago IL Home
While renting to own is not without risk (and no financial decision is risk-free), there are a ton of advantages:
- Buyers can “check out” the neighborhood before committing to a 30-year mortgage.
- Families can move in quickly and enroll children in the local school district.
- Buyers with credit problems will have time to get their financial situation in order.
- The seller has a tenant who has good reason to keep the property in shape.
- The seller will receive monthly payments, which can cover mortgage payments.
- The seller is exposed to a larger potential market by including those without perfect credit.
All things considered, not only is renting to own a home in Chicago definitely not a scam, but a legitimate option for both buyers and sellers. If you want more information on renting to own a Chicago house, the process, and our available list of local Chicago rent to own houses / lease options, click the big link below.
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