You likely considered where you were going to live for quite some time. Especially if you were planning on moving from a childhood home, school, or some other temporary arrangement to a home that you would share with your spouse and future family you probably had dreams of what this home would look like, how it would feel to move in, what it would be like to spend your days and nights there, how it would be to celebrate holidays there. Soon, though, you needed to think about paying for your house and you may have immediately thought of renting.
Renting a house seems to be the financial responsible move to many people looking for a home. This is particularly true for those that face certain financial difficulties that may stand in the way of purchasing a home. If you have been renting a house, or have been looking for Edmonton rentals, have you stopped to consider just how much renting costs you?
Whether you are looking for your first home, or have been going from rental house to rental house for years, you are paying thousands of dollars in rent throughout the course of your lease. This is the basic way that a rental agreement works:
- A person buys a home and becomes a landlord.
- He establishes a monthly payment amount—usually a percentage more than his mortgage payment.
- You sign a lease and begin making these payments.
- Each month you pay the landlord’s mortgage, and give him money to put in his pocket.
- At the end of the lease you either have to move out or start another lease—and the cycle continues indefinitely.
The landlord is not only profiting from your monthly rental payments but they are also collecting the increase in the property value, the equity.
How Much are You Really Paying?
You may only think of your rent in terms of a month-to-month payment, but how much are you really paying when you pay rent for years? Let’s consider that you pay $2,000 per month in rent:
- In one year, not including the security deposit that you will have to make, you will pay $24,000.
- In two years your total cost is $48,000.
- In three years your total cost is $72,000.
In three years you have paid over $70,000 in rent! And where has that money gone? It has gone right to your landlord, never to be seen again.
Instead, a Edmonton Rent To Own agreement gives you the opportunity to put down a small down payment—sometimes as low as a security deposit would be for a traditional rental—then make monthly payments just as you would with rent. The difference is simple—instead of your money disappearing into your landlord’s pocket it is going toward the purchase price of your home.
When your Rent To Own agreement is up, you are not just signing another lease—you are purchasing the house that you have settled in to and creating a real, stable, and secure home for your family. You are not only creating something for which you can feel proud, but you are building equity. Not being able to get a traditional home loan shouldn’t stop you from seeking your goal of owning a home. A Rent To Own agreement lets you make small payments just as you are used to with renting, but know that you are getting ever closer to having a home of your own.