Why Rent To Own Isn’t Always the Best Option
Many of our clients ask about “rent to own.” It sounds like a great deal but the reality is that the current real estate market doesn’t support a “rent to own” option.
Here’s why: Let’s say you rented a place for $2000 per month and negotiated with the landlord a 25% “rent to own” credit. (That is, at the end of the lease, you would get 25% of your rent back towards the purchase of that particular condo.) After one year, you would have “earned” $6,000 “rent to own credit.”
That credit is nothing when you consider that a typical luxury one bedroom Chicago condo sells for at least $300,000.
Plus, when you “rent to own” you often establish the purchase price at the start of the lease, not when the year is up. Things can change in the year and the value of property could drop below the established purchase price.
Assuming you want to purchase the property, you would be better off negotiating the price after your lease is up. In fact, most condos are selling at 15-20% lower than two years ago.
If you have been a quality tenant, paid your rent on time and been easy to work with, the landlord/owner is going to be more than happy to sell you their condo rather than hire a Realtor, market the property and deal with showings.
Bottom line, lease what you want to rent and buy what you want to buy. The real estate market is just too volatile right now for “rent to own.”
Search The Blog
10 Companies Headquartered in Chicago
The 7 Neighborhoods of Downtown Chicago
How Do Chicago Apartment Finders Get Paid?
Follow Us on Social
YOUR INSIDE LOOK AT WHAT'S NEW ON IGView on Social
Downtown Chicago Apartments : Occupancy Still High
According to a recent article in Crain’s Chicago Business, demand for downtown Chicago apartments remains strong heading into the Spring 2010 rental season. There […]
River North Apartments Coming Soon: Hubbard221
There are a lot of apartments coming to River North this year- 1,852 to be exact.
Tips for Decorating an Apartment
“For renters it’s important to keep in mind that you still need to create a home that really feels unique to you and […]
The Best Fulton Market Apartment Buildings
Fulton Market has become one of Chicago’s hottest neighborhoods, and it’s not hard to see why. From its trendy restaurants and vibrant nightlife to […]