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Re: renting with option to buy?
It can be structured different ways, but basically you rent a house, and after a certain period of time (specified in your agreement), you have the option to buy the house. So the agreement could say, after you rent for a year, the option to buy the house kicks in.
Usually, you have the "right of first refusal" -- meaning, if the owner decides he wants to sell the house, the tenant who is renting with the option to buy gets to decide if he wants to buy it before the owner can sell it to someone else.
Usually, some part of the rent the tenant pays during the course of the rental period will be applied toward the purchase price.
There is no one way to do it, it just depends on how the agreement is drafted and how detailed it is -- basically, whatever the parties negotiate.
I think the advantages are that (i) you get to "test drive" a house by living in it before you buy it, and (ii) if you decide to buy it, you were bulding equity with your rent, essentially, or at least with part of your rent.
If you are planning to rent anyway, I don't really see a big downside to renting with the option to buy, because you are not locked in to buying it.
Hope this helps!
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