Rent to Own Homes...good idea?
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If you dont believe about the appeciation cycle, click on yahoo real estate and look at the housing market snap shot for any area of the last 5 or 10 years. You will see we just hit the top of the cycle and we are on a downtrend.
Rents are at lows right now, with all the competition and most landlords will lose money every months just to get tenants in. In my area a 3bdrom house to rent costs 1200 per month. To buy it my mortgage would be 1800 per month + i would be paying 3000 per year in property taxes, my own water/garbage plus have to fix anything that goes wrong in my home. So i save approx 900+/- per month by renting. I did the math once and figured it would take something like 11 to 12 years before i was ahead in my home than if i had just saved all that money and invested at 5% interest in bonds every 6 months. Not to mention the stress of having no money for 10 years because its all going to the house. I dont know about you, but saving 900 per month is a nice vacation anywhere in the world a couple times a year for me. But then again, your market may vary. For instance OH looks like it could be a good time to buy there as its getting close to a bottom, but anywhere in California is bad right now.
Anyway...in summation i think rent2owns are bad ideas. Just like the rent to own stores where you buy a computer or a couch. You pay too much. They are only there to take advantage of the poor, or people desperate to buy a house because they have the media telling them thats the best thing to do. Do your research and find out if its a good idea to buy in your area (dont ask a realtor as they will always say yes because they are there to make money) Sorry i went on for so long.
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