As the cost of buying a home on Guam rises, we’ve been getting a few inquiries about “Renting to Own.” So… sounds like a blog post to me.
Rent to own has been done on Guam, but it hasn’t really caught on yet. There are a number of reasons that rent to own is beneficial to both buyers and seller, and some drawbacks too. As with anything, carefully consider all your options before making a decision to sign any agreements. Read several articles readily available on the subject and think it through carefully.
Some of the potential advantages to a rent to own scenario for the buyer, is that it gives them a chance to “save up” in the form of rental payments to be applied to their down payment or loan principal, and you can live in your dream home while you do it. It may also give buyers with dings on their credit an opportunity to fix them in order to qualify for a more attractive loan. And, since the selling price is fixed, you might gain some equity if the home appreciates in value while you’re in the “rental” stage.
Generally, there will be some deposit required up front. This is negotiated and agreed upon in the purchase agreement. The deposit is held by the seller and waived by the tenant-buyer in the event they fail to secure financing or decide against buying the home. If you go through with the purchase, all or part of the rent payments are applied to the price of the home, both of which are fixed and agreed upon in the purchase agreement.
As home prices continue to climb on Guam, this may turn into a viable option to consider if your dream home is just out of reach of your budget for the time being