An apparent resurgence in lease-to-own programs is helping renters improve their credit or accumulate the cash needed for down payment and closing costs to buy a home. In recent years, a variety of lending programs have been created that allow purchasers to buy a house with little or no down payment. Government programs have been established to help low- and moderate-income buyers with down-payment money. These two types of programs have made achieving the goal of homeownership easier for some buyers, lessening their need of a lease-to-own arrangement.
Fledgling entrepreneurs - owners of accounting firms, machine shops, print shops, distribution companies, dry cleaning establishments or any other small businesses - face the question of whether to lease or own the property housing their business. Unfortunately for those seeking a quick fix, there is no "right" or "wrong" answer. A variety of factors pertinent to the individual business and the owner's objectives, as well as local market factors, must be taken into account before an informed decision can be made.
Renters who are monitoring local home prices and interest rates may be eager to buy, but their credit history, lack of savings or employment history may keep them from qualifying for a home loan. Other renters may be reluctant to buy now, fearing that home prices have not yet hit bottom. Homeowners who have been unable to sell their home - or who are waiting for prices to rebound - may have become unwilling landlords because they are out of options.
Leasing activity is up 50 percent this year and about 470 of the 20,133 properties offered for sale in the multi-county Indianapolis region now advertise a "lease with option to buy," alternative, Flock said, citing listings from the Broker Listing Cooperative.
While not all renters are interested in buying a home, for those who are, lease-to-own programs are meeting broad acceptance by multifamily owners and managers across the country. And some of these pre-planned and orchestrated move-outs occur with the landlord's blessing and cooperation.
Two couples who have run the Swain Resort ski area in Allegany County for the past two years have completed their purchase of the facility, with assistance from the county and the county Industrial Development Agency. Scott and Jodi Carts and Shawn and Celeste Schoonover, the principals of Denton Hill Family and Ski Resort Inc., said in a release that they paid an undisclosed price to complete the lease- to-own agreement for the resort that was signed in August 2009 with the owners of Swain Recreation Center LLC, Philip Saunders and David Flaum.
(This article originally ran in the Colorado Springs Business Journal, Colorado Springs, CO, another Dolan Media publication.) While not all renters are interested in buying a home, for those who are, lease-to-own programs are meeting broad acceptance by multifamily owners and managers across the country.
The school district is preparing to move forward with plans to build a new Engineering and Science University Magnet School in West Haven thanks to a new lease on a site near the University of New Haven. The Board of Education recently approved four lease-to-own contracts and agreed to pay $41,000 by the end of the year to secure the space until the end of June 2012. The four sites total about 3 acres and are about 1,300 yards from UNH, which will play an integral role in the new school. The biggest parcel is the former Hollow Bowling Center, which would have to be razed.
For many buyers without cash or with credit problems, one solution to homeownership has been a lease-to-own contract. The traditional wisdom behind this arrangement has been that the buyer is able to rent the property from an owner for a designated period, usually paying a rent higher than market rate. The extra cash is then applied to an agreed-upon down payment. In the end, once the down payment is acquired - along with a better credit rating for the buyer, one hopes - the transaction is consummated with a settlement and the property changes hands.
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