The average asking price for a home in New Orleans at the beginning of 2024 was around $365,000. To buy this house with a conventional loan, you might need $73,000 for the down payment.
Many people can't afford this, yet they want to become homeowners. The good news is there is an alternative: rent-to-own homes.
Are you interested in learning about these? Continue reading to discover how rent-to-own homes offer a pathway to homeownership in New Orleans, Louisiana.
What is Rent-to-Own and How Does It Work?
Rent-to-own homes offer a way to purchase homes without using a financial institution for a loan. Instead, the homeowner acts as the lender to the buyer.
The buyer and seller reach an agreement on the deal, which includes determining a purchase price, monthly payments, and responsibilities. The buyer also offers money down.
The buyer takes possession of the home and treats it as though it's theirs. They make payments and handle the maintenance and repairs. After several years, the buyer must get a loan to buy the home outright.
The deal can last for five years or longer, depending on the agreement between the two parties. Rent-to-own agreements are contracts containing all the details and terms.
You can look at the current real estate trends to learn more about these homes and others.
Benefits of Rent-to-Own in New Orleans
People consider rent-to-own homes as affordable housing options and offer several benefits.
First, they allow you to buy a house without meeting a lender's credit score requirements. You will have several years to work on your credit before you get a home loan.
Secondly, you won't have to meet a lender's down payment rules. The seller may require money down, but they will work with you on the amount.
Next, you build equity in the home. Part of the money you pay monthly goes toward the home's principal, giving you equity from the start.
Finally, you guard against rising home costs due to inflation. You lock into the home's purchase price today but won't need a loan until later, protecting you from inflation.
Potential Drawbacks of Rent-to-Own Homes
Before rushing into a rent-to-own home, research the real estate market and consider the drawbacks of buying a rent-to-own home. As with any alternative option, there are drawbacks.
The primary drawback is the potential to lose the money you invested in the home. You might fall behind on payments or decide you don't want to continue with the home purchase.
In these situations, you will lose the down payment on your New Orleans property. You might also experience costly expenses on the home you weren't planning to make.
Pursue Rent-to-Own Homes
You might decide to pursue rent-to-own homes after learning about them. They offer a path to homeownership in New Orleans, Louisiana, for those who may not qualify for a traditional home loan yet.
PMI New Orleans is a full-service property management firm. We offer services to landlords, tenants, and those looking for rent-to-own homes. We specialize in excellence in all our services.
Get in touch with us today to learn more about rent-to-own homes.
