Rent to Own Land

Rent to Own Land

The dream of home ownership is fast approaching unrealistic for many Americans, as banks tighten their lending requirements and require higher down payments, while at the same time our finances are looking bleaker with many pay cuts and layoffs.  Rent to own land, or land that is financed by the owner, has long been looked down upon as a foolish debt to take on, but if you want nothing more than a place to call your own and are financially unable to meet today’s lending requirements, it starts to look like a better option.

In some cases, you can buy land with no down payment from an owner who is willing to finance.  Some savvy business owners make a living by selling land this way.  From their perspective, it is a brilliant business model.  Land does not depreciate like other tangible assets, so even if a buyer defaults, they can still sell it for the same price, essentially gaining a whopping amount of interest by letting someone rent to own and then selling it to a new buyer.  It could almost be better for them if you default, but a high interest rate on the balance ensures that they make money either way.

From a buyer’s perspective, rent to own land can get you the satisfaction of land ownership when all other options are unavailable.  When all other doors are closed, that high interest rate is well worth the price if it means you can have the freedom of your own place.  Most rent to own land companies do not report to credit agencies either, so if the unthinkable happens and you must forfeit the land, your credit will not be  compromised.

Rent to own land is not the ideal solution to owning your own property, but it is an option to consider when all others fail.