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Frequently Asked Questions for Rent to Own (FAQ for RTO)

by | Apr 8, 2022 | Rent to Own, Typ

Rent to own FAQ

In the world of rent to own there are many common questions that renters just like you ask every day. Here are some of the most popular ones, and of course– answers by The Renter’s Best Friend.

Rent to Own Frequently Asked Questions

Will I qualify to get a rent to own home?

This is the most common question that we’re asked, and candidly speaking more people qualify than you’d think. Truly the best way to answer this question is to click here to see if you qualify. It doesn’t cost you anything, and it’s simple.

What does my credit score need to be?

This is a common question, and the answer is that it depends. One of the most important aspects of any personal financial agreement is your credit score, so you need to be aware of what you’re working with. We recommend that you click here to get an updated credit score so you aren’t guessing. And if you already know that your credit score is a little lacking, click here to get some more info about our trusted, effective credit repair option.

Do I have to be employed to qualify for a rent-to-own home?

Yes. Rent-to-own home contracts work similarly to other rental agreements. You will need to provide your financial history, like bank statements, income reliability, and credit reports. While rent-to-own homes are a great option for those who need time to save money for a down payment and build their credit score to qualify for a mortgage.

However, you will still need to ensure that you will be able to make on-time rental payments every month and that you are working to be eligible for financing at the end of your lease agreement to buy the property. 


Do I need renters or homeowners insurance on the RTO home?

While you are renting the property through a rent-to-own agreement, it is highly recommended that you take out a renters’ insurance policy to protect your assets on the property regardless if your landlord requires you contribute to a homeowners policy. 

Once you purchase the house, you will need to switch to a traditional homeowners insurance policy. 


Who is responsible for the taxes on an RTO home?

It depends on your lease agreement. It may be more convenient for the landlord to pay the fees that come with being a homeowner. However, because you are going to be the planned owner at the end of the lease agreement, the seller may require you to contribute to paying some or all of the property taxes as well as HOA fees.


Whose name is on the deed in an RTO agreement?

The homeowner or the seller will remain on the deed as the true owner of the home until you buy the property. 


Do RTO homes come fully furnished?

Sometimes. It depends on the landlord. Some sellers will use furnished spaces as a way to charge more in rent. 

It may be worth it to enter a fully-furnished rent-to-own home because you won’t have to figure out buying furniture and putting it into your monthly budget. You also won’t have to pay for movers when you move into your new home and it will be a lot easier to settle in. 

However, there is also the risk of the furniture being old and not to your style or liking. You may also lose out on the option to buy the property at the end of your lease agreement if any of the items are damaged. You have to return the furniture to the seller once you buy the property. 


Can I replace the roof or redesign an RTO home?

Yes and no. It depends on the terms of your rental agreement and what clauses and languages state that you have the ability to make renovations and do major repairs. Be sure to include this clause, especially if you are signing a lease option agreement. 


Can I sublease an RTO home?

A sublease is a situation where a tenant rents out their home that they are already renting from a seller or landlord. The OG tenant becomes the sublettor/sublessor and the new tenant becomes the subtenant/sublessee. The OG tenant will remain on the lease agreement and is responsible for all of the rules and responsibilities of the lease, as the new tenant will not be added to the lease. If a subtenant causes damages or does not make timely rental payments, the OG tenant is held responsible. 

With a rent-to-own agreement, there is another liability concern. If this subtenant causes damage, brings in pets when prohibited, or misses rent, your lease agreement made be made void and you will lose your option fee and rent credits. You may also be liable to legal action. 

Double-check your lease and talk to your landlord to make sure that you agree on subletting part or all of the property. Most landlords or sellers will be hesitant or refuse to allow you to sublet as they prefer to limit occupants to those whom they have thoroughly screened and vetted. 


Can I Airbnb an RTO home?

Like any rental agreement, there are certain terms and conditions that come with subleasing. However, Airbnb adds another layer and many sellers of rent-to-own homes may find that there is too much of a liability.

When you signed the rent-to-own agreement, you and your financial responsibility were screened thoroughly by the homeowner. With Airbnb, there are dozens of people they haven’t screened coming in and out of their property. There is an increased risk of property damage as well as injury. If someone gets hurt on the property, you and the homeowner could be liable for a lawsuit.

If you’re considering listing the property on Airbnb, check your lease agreement and speak with your landlord. Being upfront about it is much better than trying to go behind their back and having to come clean after an accident happens. Be careful with who you let in your house and do everything you can to avoid voiding your lease agreement. 

Remember, if you still don’t know if you qualify for a rent to own home, that’s the first question you should answer. Simply click here to see if you can qualify for a rent to own home and change your future forever.

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