Renting to own property is not all that different to a rent to own car policy. Renting to own a car is simple – the customer rents the vehicle for a certain time period and they can then decide to purchase the car at the end of the lease period. With property, rent to own works in a similar way, just on a larger scale. Renting to own gives interested buyers a chance to ‘try out’ a home before buying it. By living in the home as a renter the tenant can put off major financial commitment until further into the future.

The rent to own policy is becoming more popular. It gives future buyers a chance to get a feel for the neighborhood before moving in. first time owners in particular are flocking to rent to own opportunities. This is because saving the large lump sum of cash for a down payment on a house purchase is difficult especially compared with the relatively small down payment required on a rent to own property. Both buyer and seller benefit from rent to own. These quick facts will help you understand rent to own to decide whether it is right for you:

The property price and the rent amount are both determined by market values however buyers can still negotiate, which is why it pays to do your research before going property hunting. If you are a buyer then try and negotiate a longer option period in order to provide time for the buyer to repair any bad credit records and save money for their property purchase. Sellers will usually want a shorter option period so that the house can be sold as soon as possible.

Rent to own can be more profitable for sellers compared with a cash sale as more money can be made from the property before it is sold. If the buyer chooses not to buy the house at the end of the lease period, the seller pockets all the rent payments plus the option fee. Additionally the seller may receive tax benefits on the mortgage interest during the option period. The lease period us usually from one to three years, depending on buyer and seller agreement. In most cases the property can not be sold to another buy while the rent to own tenant is under contract.

You decide to put one of your rental properties up for sale on a rent to own basis. You find a tenant/buyer who’s very interested in owning the house for himself and his young family, but has had a hard time securing a mortgage with the bank. The rent to own program works well for him as he’s building his credit while he gets to live in the house he wants. He puts down $3000 on a house with an option to purchase the house for $150,000 at the end of a two year lease. You also agree to apply 10% of the monthly rent of $1200 to the purchase price.

Generally speaking, A home inspection is a visual inspection of a home. An inspector is not able to look under or between floors or inside walls. While this is a standard limitation to an inspection, there are other sometimes other limitations that are imposed by circumstances. These circumstances might lead to a less than ideal situation. For example, it is not uncommon to find homes where the utilities are shutoff. This is frequently the situation at homes that are vacant. The seller might have had the home on the market for some time and decided to save money by disconnecting the utilities or, in cold weather, the decision could have been made to winterize the plumbing and have the main water turned off.

The likely scenario, and how it impacts the buyer, is that that person wants to buy the home and the inspection is scheduled to visit prior to the systems being turned back on. This is problematic and it is best if the realtors involved evaluate this situation and try to get utilities turned back on prior to the inspection. Needless to say if, when the inspector arrives, there is no electricity, no fuel (gas, propane, heating oil) and or no water, the inspection is very limited. Sometimes a few utilities are hooked up, but other key utilities are not. Whenever any combination of circumstances, such as described here, exist the inspection is very limited in scope.

When the water is off, an inspector cannot look for active leaks at sinks, tubs, toilets and other fixtures. Furthermore, the inspector cannot test the positioning of hot and cold water taps (hot water to the left), nor can the water pressure or the temperature of the hot water tank be evaluated. When electricity is off, outlets, lights and most things electrical (heaters, furnaces, electric water heaters, disposals, ranges, refrigerators) cannot be evaluated.

The inspector can look in the main electric panel, but that is about all. It is possible that the inspector might be able to determine if there are any GFCI outlets or see knob and tube or old two-prong systems. When gas is off furnaces, and often water heaters, go without being performance tested, other than a few visual checks. When these elements of the inspection are excluded, it decreases the quality of the inspection and the value to the client.

Home inspectors only operate normal controls, if you work in real estate, and do not know this. The inspector will not come in and start turning on the main water valve, the main breaker, the gas from the propane tank, etc. If these systems are inoperable when the inspector arrives, they will remain that way and not be evaluated. The reason: The inspector does not want to be responsible if turning on the main water leads to a ruptured pipe in the house, or if flipping the main breaker leads to a fire or electrical short. When main controls are turned off, it sometimes means there is a more serious problem in the home and an inspector cannot take the risk of finding out.

For the buyer, the importance of a home inspection is just as important as for the seller. The benefits to having a home inspection done are that you will be able to find out everything about the home before you buy it. This will allow you to see the home up close so you know exactly what you are buying.

For the seller, the advantages of a home inspection are that you will be able to find out about any previously unknown problems or potential upgrades so you can address them before you sell. It is always important to be aware of any issues in advance so you can disclose the problems to the buyer if you are not able to fix them. This will allow the transaction to go smoothly for everyone concerned.

Now that you know what the importance of a home inspection is you need to know how to get it done and what your role should be during the inspection. The seller is usually the one to get the home inspection done but the buyer can also have their own inspection done if they choose to. So if you want to get someone to inspect the home you will need to do a couple of different things.

You want to make sure that you hire a professional. Make sure that the inspector you use is a member of ASHI or American Society of Home Inspectors. This way you know you are getting someone that knows what they are doing. In Canada there are currently no mandatory certifications or legislative requirements for home inspectors, however there are industry associations such as The Canadian Association of Home and Property Inspectors (CAHPI).

After the home inspection is done you want to make sure that you get a copy of the printed report. You can usually get the written report with no problems but you want to make sure that you ask about any photos that may have been taken during the inspection. It is a good idea to have a copy of both the report and photos.

Be at the home inspection. You don’t have to be but if you are than you will be able to ask any questions you have. This is especially helpful for the buyer of the home because it gives you a chance to become more familiar with the home and it will add confidence that you are getting a good home.