For millions across the USA, owning a home is the American dream that is slowly moving beyond their reach. Gaining popularity helping renters enter the housing market is… rent-to own home ownership programs. And there are plenty, with home prices soaring, a somewhat obscure path to home ownership is becoming mainstream.  It’s called rent to own homeownership.

Owning a home is an ambitious goal for everyone. And like any worthy goal, its takes commitment and good planning.

The problem is not affordability, most rents  are at least as much as a mortgage payment on the same home. The problem is saving up the down payment.

Most people struggle with debt, have little saved for retirement, and have seen the home ownership ladder kicked out from under them. The goal should be to get in that first rung of the latter and a Rent-to-Own a home agreement is a great solution.

You need a two-pronged approach to get into the market with a rent to own arrangement. 

The biggest mistake people make when looking for a rent to own home is they look for their perfect home right out of the gate.

Instead you should be looking at homes that may not be ideal, but you can live in for a couple years, take ownership and get in the market. Then you got some leverage!

“Rent-to-buy” programs, as they are sometimes called, are an investment.

Monthly instalments would be paid as part of the rental agreement and go towards a down-payment to eventually purchase the home for a set price at some point in the future.

Typically, tenants ‘option’ a home for a period of time (1 to 5 years), with a fixed purchase price at the end of the term. At the end of the term and with the equity accumulated, the tenant is expected to qualify for the mortgage or enter into a shared homeownership arrangement which supports underlying affordability.

Shared ownership plans: The property owner shares ownership of the home to lower the price of the mortgage held by the rent-to-own home buyer to the equivalent of 80% of average market value.

Conditions are set out in the rent-to-own agreement to protect both parties.

There are benefits for both parties, tax benefits for the home owner and and home ownership for the renter. As in any real estate transaction seek the advice of a lawyer when the time comes.

For now jump in, get yourself educated, move forward and if you don’t give up you will win the day! You have started your journey already, now take a look at what’s available here.