In the industry of real estate investments, there are actually two terms that are commonly being used by the people especially when it comes to residential or house properties, and these two terms are rent to own and owner financing. Rent to own and owner-financing are terms that refer to the unconventional but well-paid ways or methods on how a person may purchase a property, and these two terms are included in the acts of home financing and investment property financing. The term owner financing can also be called as seller financing, and it is basically referring to a specific transaction that allows or enables the buyers to purchase or buy the house property in an outright manner without the undergoing a banking system; while the rent to own is actually referring to a specific transaction that is providing the buyers of the property to try or test-drive it first before deciding to completely purchase it.
For clarification purposes, the term rent to own is actually a certain type of documented transaction that is legally practiced and made for payment in a weekly or monthly basis and they have this privilege to purchase the property immediately, and some of the inclusions for this transaction include the consumer electronics, real property, home appliances, motor vehicles, and furniture. Rent to own can also be called as rent to buy and rental purchase; the owner financing, on the other hand, can also be called as seller financing and this term is also defined as an arrangement that is contractual and may vary depending on the circumstances, and some of the common contents of the arrangement include the schedule of payments, the interest rate, and the purchase price. The seller financing is basically considered as an easily understandable option for financing a real estate property and such involves the fact that the buyer will be the formal owner of the home property while she or he is still paying; while the option of rent to own is providing or giving the buyer an opportunity or a chance to try the new available property in the real estate market.
A person who wants to try their luck in the world of real estate investing may first do some research in choosing the right type of transaction for them and remove the option of getting or using traditional mortgages off their list of options. Some of the common similarities between the rent to own and owner finance include the fact that it is letting the buyers own the residential property regardless of their credit status, they are also the best option in real estate or home financing, and lastly, the two financing options can also help the buyers to secure their financial standing in the future.