The “Rent to Own” option is an attractive idea for those wanting to gently ease into homeownership. It seems like a win/win for both the seller and renter. The seller gets a consistent monthly payment, and the renter eventually gets a home to call their own. Unfortunately there are many dishonorable homeowners and realtors who take advantage of renters and run off with their hard earned money. Before you pay one red cent towards a rent to own property, here are three common scams to watch for.

1) Contract tricks:  Some dishonest homeowners who are offering the rent to own option are looking for any reason to void your contract after you‘ve paid a high option fee. Something as miniscule as a late payment or growing your grass too long can make that homeowner state that you are in violation of your contract. This means renters are out of a home, lose their option fee, and lose future equity money as well. The homeowner can then pull the same scam on another unsuspecting renter and receive another whopping option fee.

2) Who’s house is this?:  Renters who want to own have to make sure to verify who owns the home. Many desperate homeowners may be going through foreclosure and may try to rent out their defaulted, bank owned home to an unsuspecting renter who will later get the rug pulled out from under them when foreclosure notices come pouring in and their money is long gone.

3)  Protect your wallet: Many dishonest investors are trapping renters by advertising very low monthly payments to get a flood of potential renters. But what those renters don’t know is at the end of the lease term, they may not be able to afford the new monthly payments. What happens then? The original investor gets the house back and renters just lost their money. Just another cautionary tale that some devious real estate investors neglect to share.

Renters, do your research! Read the contract, and have a licensed real estate attorney help you. There’s no reason to get scammed out of your money and dreams of homeownership.

 

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This is filed under Rentals.


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