Get free access to our world class MLS search tools, save your favorite listings, create saved searches & much more!

Rent to Own Homes In Vegas: Good Deal or Scam?

Posted by Mastura Zaini-Roberts on Saturday, April 19th, 2014 at 7:28am.

Las Vegas Rent to Own ScamsWe get calls all the time from people who want to “rent to own” a home, and we usually tell them there is really no such thing. You could possibly do a lease purchase. That is where you actually sign a long term purchase contract then lease the home from the seller prior to closing.

But these days there are very few sellers that are in a strong enough financial situation to do a deal like that, so your housing choices are extremely limited. And you have to be careful that the seller is not upside down in the home or they may just pocket your deposit and rent payments and disappear when it is time to close. Very few potential buyers are able to find a "rent to own" home that actually fits their needs. After more than 30 years of selling homes in Las Vegas, we have seen only a handful of lease purchases work out well for both parties.

But now there is a new generation of real estate “entrepreneurs” that advertise they will purchase ANY home you want to pick out, and they will lease it to you until you can get financing and buy it from them. Sounds great in theory – you can go house shopping and find your perfect dream home right away!

BUT….

  1. They will use YOUR money for the down payment and closing costs. It costs the investor nothing out of pocket.
  2. They collect the rent while you are leasing. You still don’t get the big tax deduction benefit of home ownership, and you are probably paying more than market rent to cover the cost of the mortgage interest, taxes, insurance and any HOA fees
  3. They tack on a hefty profit to the sales price they originally bought the home for. You will usually end up spending an additional 10% to 15% more for the home, depending on how long you need to lease it before you can get financed.

And what happens to your earnest deposit if the investor declares bankruptcy or has an IRS lien placed on him before you are able to buy?!! If you do any home improvements in the meantime, those are also down the drain if you can’t purchase the home because the investor goes belly up.

Like most things in life, if it sounds too good to be true, it probably is. And this is one idea that is NOT in the best interest of any buyer, in our opinion. Better to wait out any credit issues and rent until you can qualify for a mortgage and buy a home on your own. Or, if you can save up enough down payment, find a home with true owner financing where title transfers to you. Whenever the title to your home is in someone else's name, your money is at risk.

Mastura Roberts
(702) 919-5400
offers@greatlasvegashomes.com

Team Leader, The Tonnesen Team
Berkshire Hathaway HomeServices, Nevada
3185 St Rose Pkwy #100 Henderson, NV 89052

With over 30 years of experience helping families call Las Vegas "home!"



Related Blog Posts

Is B of A Finally "Getting It" on Short Sales?

Yes, it actually DOES look like Bank of America is finally getting their act together in the Las Vegas real estate market on short sales! We have seen a marked improvement in service and approval times over the past six months, and just recently B of A has rolled out two new changes to improve their image.The first big...

Living in Las Vegas Means Always Having a Show to go See!

One of the things I love most about calling Las Vegas home is the wide variety of entertainment we have access to, especially some of the “small” shows that few tourists ever notice as they scan box office lists sprinkled with international celebrities. There are some surprising gems in the smaller lounge type sho...

The Big Challenges Home Buyers Face in 2017

What are the top challenges your home buyers face this year? A recent survey from realtor.com® reveals the following: 1. Low inventories: There aren’t enough homes for sale and inventory woes are expected to worsen this year. Active inventory in December 2016 on realtor.com® dropped 11 percent compa...

5 Mortgage Tips If You’re Building Instead of Buying

One of the most challenging aspects of the home-buying process is getting access to financing. Securing a loan can be even more difficult when you’re planning to build a house from the ground up instead of getting a mortgage to purchase an existing property. If you’re building instead of buying the home of...

Residential Resale Report - October 2017

The Southern Nevada economy continues to expand, and the population base has responded accordingly. An influx of new residents has helped bolster demand in the housing market. With strengthening conditions experienced throughout 2017 expected to continue, similar housing supply-demand dynamics are likely to follow. In...

Leave a Comment

Have a Question?

Contact Us

Follow Us