Rent To Own a Home: Disadvantages

by agentluke

in Uncategorized

Be careful.


There are some dangerous disadvantages to rent to own homes for buyers. First, rent to own can sometimes be a scheme.  The scheme tricks buyers into signing agreements and making large down payments all with the end goal of the buyer missing a single payment and therefore instantly and lawfully losing it all quickly in foreclosure. In other words, the seller takes advantage of the buyer contractually and legally swindles them out of their down payment and equity they have built up from past payments.

Second, rent to own will not help a buyer’s credit score. The buyer’s payment history will not be reported to the credit bureaus like a real mortgage lender would.  Therefore, a good payment history will not show up on a buyer’s credit report.

Third, in Topeka and likely many other markets there is no standard rent to own contract. In the Topeka market there is a standard purchase contract agreed upon and provided by the Topeka Area Association of REALTORS (TAAR).  TAAR does not provide a standard rent to own contract.  I believe that speaks volumes about the benefits and frequency of rent to own.  In fact, in seven years I have never put together even one rent to own contract and I have counseled many buyers, as well as sellers, to avoid the situation.

Lastly, when a buyer rents to own they still have what seems like a landlord, the owner of the house. Even worse, this “landlord” is not there to fix things and pay for them, but instead the “landlord” is only there to observe and have a problem when the people living in the home are doing things to the property the “landlord” does not like.

The long and short of it is, DO NOT RENT TO OWN if you can avoid it.  Buy a house through the standard process and obtain a mortgage through a bank.  Agent Luke Thompson can help you find a lender to provide your mortgage.  If your credit needs a boost we can develop a plan for that, too.  Please call or text 785-969-9296 for real estate buying or mortgage assistance in Topeka, Kansas or Lawrence, Kansas.

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