A rent to own tiny house is similar to any other rent to own situation. You will find the home that you want. If you qualify, you will sign a contract. You will pay rent according to that contract. Then, when the term of the rental agreement is up, you will have the option to buy the home. Let’s drill down and learn more about it.
Rent to Own Tiny House Avoids Mortgage Problems
One of the primary reasons to choose a rent to own tiny house is because with it you won’t have to pay a mortgage. Your rent-to-own contract might be structured in a variety of ways. Generally speaking, though, the rent that you pay will go at least in part to cover the purchase of the house in the future. When the rental period is up, you’ll pay whatever is left to purchase the home. Then you’ll have your tiny home free and clear.
This is important because sometimes it’s really difficult to get a mortgage to buy a tiny home. Many mortgage lenders simply don’t work with tiny homes. If you can get a mortgage, it will probably be a slightly higher rate than a traditional mortgage. This varies from place to place, but it’s a major reason why people choose a rent to own tiny house. Rent to own allows you to purchase the home as you go.
There Is Also a Smaller Down Payment
When you rent to own, you may pay an upfront down payment. Alternatively, you may structure your agreement so that a larger percentage of monthly rent goes to create your down payment. Either way, you ultimately pay some kind of down payment to purchase the home. The cost of a tiny home is typically much lower than that of a traditional home. Therefore, you’ll have the option to pay a much smaller down payment. That’s an advantage of buying a tiny home in general and it pays off with a rent to own tiny house as well.
You Get The House As Is
There are many different ways to purchase a tiny home. When you rent to own, you invest in a tiny home as it is. In other words, you choose a house that has already been constructed. There’s nothing wrong with that. If you love the home, that’s great. If you want to make a few minor changes, you can do that once the sale is complete.
However, if you have the option to DIY your own tiny home, then you can save a lot of money. You can customize it to your exact needs. This is more important with a tiny home than with a large home because you really need to maximize each iota of space to suit your lifestyle. If you can design and build a tiny house from scratch, you’ll get exactly what you need. Moreover, if you can DIY a lot of the construction, then you can save on costs. You lose these benefits with a rent to own tiny house.
Additional Considerations for Rent to Own Tiny House
Here are some more things to keep in mind:
- How long you plan to live in the tiny house and if it will have resale value
- Who is responsible for maintenance costs while you rent? (Usually it’s you.)
- Rent to own tiny homes typically cost between $80 and $500 per month.
- The logistics of parking your tiny home and if that will change after purchase
- Additional fees including utilities, maintenance, taxes, permits, etc.
- Rent-to-own is usually cheaper than renting but more expensive than buying outright.
- Pros and Cons of Tiny Homes fro Frugal Living
- 10 Questions You Should Ask Tiny Home Builders
- What to Expect at a Tiny House Conference