Every once in a while an economic recession hits hard in most parts of the world, due to the hyperconnectivity of our present day through technological advancements and global commerce. The last one we can remember very well started at the housing bubble crisis of 2007, and no one was prepared for such event, millions lost their jobs/homes and a new political landscape came to enforce change with divisive results and reactions.
Now, many experts claim that a new financial downturn is already on its way, they are able to predict such phenomena thanks to innovative tools applied to macroeconomic monitoring systems. The year can be 2019 or 2020, making your margin of response extremely limited to act, but at the same time very attractive if you apply parallel thinking to a market that is about to re-design itself again.
Out of the Box
Same as all the diverse sectors of the economy, the value of homes tend to rise, fall and rise again. In the particular case of a recession, bubbles burst and the speculative character of an industry gets exposed, making it fall sharply in a short period of time, that is when the most audacious minds act accordingly, opening themselves to new approaches, business models and strategies.
Working as lease options, rent-to-own homes are properties in which the owner is completely open to lease the home to someone for 2 or 5 years in most cases, once the time has ended, the actual renter of the house gets rewarded with a purchase option that has an agreed amount of money to be paid.
A large number of first time homebuyers use this tactic to find their new place to live, and since more and more banks are pretty insecure about who they lend their money out, a rent-to-own option allows them to solve this urgency in a matter of weeks and even days with the help of some useful elements such as:
- Ability to evict: Helping the landlord to remove the tenant from the property if the latter stops paying rent and other expenses.
- Deposit: Protecting you and the property against any impactful damages coming from both sides of the table.
- Defining the final price: Safeguarding both parties in case of a valuation or devaluation in regards to the whole industry.
- The famous 2 percent: Is an option fee in the form of an upfront lease, conformed by the 1 or 2 percent of the final purchase price.
As any other real estate transaction, the rent-to-own approach is not free from any risk, and to minimize damages, we suggest the use of professional help, talk to your agent or attorney about all the required paperwork and legal compromises, in this way you can guarantee a successful run throughout the whole homebuying process.
Expected to be seriously disruptive, the coming recession will alter the market again, and banking institutions will retreat in regards to giving loans freely. Having an alternative solution can be crucial, and rent-to-own has become an open doorway for thousands of families across the United States right now.