Lease to Own- Saving for Your Down Payment

With the Real Estate market where it is ..sellers and investors are more creative than ever. Builders, Land Developers and the like have suddenly found themselves sitting on product with minimal qualified individuals to purchase. There are a lot of builders and house "flippers" that have built a spec home or a "fixed up" a distressed house now cannot find buyers.

These investors need to cover their payments or they are at risk of losing their investment and the house to foreclosure. Herein comes the Lease to Own. I have incorporated this into several houses that I own and could not sell. Investors are more likely to look beyond some credit blemishes as long as you can prove that you can make the monthly payment. It is a win-win. This is a great way to save for a down payment.

How? Well in addition to any contributions towards your savings account monthly and being "Disciplined" as previously mentioned you can maximize your savings through a lease to own. If you are currently renting with a payment of lets say $1000.00 per month you are currently giving 100% of the payment to the landlord.

In a lease to own scenario, the Landlord agrees to set a percentage of the payment towards a down payment to purchase the home. This percentage will vary and can be negotiated. For example, a landlord may agree to allow 30% of the payment to apply towards the down payment to purchase the home. This would equal $300.00 per month of the $1000.00 overall rent payment to be put in a kiddy which equals $3,600 per year. Lets say you are already saving $300 per month outside of your existing rent you now have doubled your savings from $3,600 to $7,200 in just 12 months.

Lease to own deals are common and just take a little research to find. You can also approach existing Builders and investors, in your market, and see if they are willing to entertain the thought. Watch the local paper and trade magazines in your area for houses that have been on the market for a period of time and or express "Motivated Seller" or "Creative Financing Available". These sellers will be more open minded. And for the sellers who are not promoting this but have been sitting on their house for a while may just need to be educated to the idea. This is a great way to move into a house now in which you begin building equity from the start in addition to automatically saving towards a down payment monthly. This is also a great option for individuals who can afford a monthly payment but are strapped with being able to save anything additional. .. this is a cycle that a lot of Americans find themselves in these days. Of course you will need to research the subject a bit and get familiar with the concept if you are not already but this can be one of the best ways to build equity and savings for a house.

Good luck to you

Sean McAlister”