On any given work day I will receive a call from a very motivated buyer who wants me to help them find homes that are on the market for lease purchase. These buyers want the best for their future and believe a lease purchase is the best scenario for them to obtain the American Dream of home ownership.
Being an optimist at heart, I want to help each and every one of them in their quest. But, the honest truth is that lease purchases very rarely lead to home ownership.
For the investor, a lease purchase is a home run. They can ask for higher deposits and rent amounts with longer lease terms. Usually the renter/buyer takes better care of the home because the tenant believes it will one day be theirs. I have even heard of tenants doing upgrades and improvements to the home of the investor because they believe their hard work will be to their benefit.
The truth is many investors know the reality. It is very rare for their tenant to actually buy that house in a year or two. So, when the lease term is up and the tenant is unable to purchase the home, the investor can ask for another high deposit or seek another tenant/buyer. And the cycle continues...
What buyers should do is talk with a lender and have them look at their credit report. If it looks like you only have about six months of credit repair to do than you may consider it. But, if you look at your credit and realize you must truly save more money and do credit repair, you should continue renting. But, while you are renting, pay down what you can, create a budget and stick to it and put aside the amount of mortgage payment you think you will be able to pay every month. For example, if your rent payment is $800 and you think you can handle a mortgage payment of $1200, then after you pay your $800 put another $400 in savings and feel what it is like to live with that mortgage payment.
I believe that home ownership is for everyone; it just depends on when you will be ready. If you want to buy a home in a year, than start preparing today and not a year from now!!
Homeownership is in your grasp!
Don't throw away money trying to pursue a lease purchase.
Comments(6)