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

Buy Real Estate Like Warren Buffet!

Most real estate investors follow the latest fads when determining what they will buy. They usually focus on short term gains rather than the overall big picture, and tend to buy in environments of economic euphoria rather than environments of economic doom and gloom. They go with the herd mentality. Warren Buffet’s...

Do You Need a Home Warranty? A Look at the Pros and Cons

We all like having additional peace of mind when it comes to the systems and appliances in our homes. Things inevitably break down over time, but most of us don't plan for the furnace to die mid-winter or for the dishwasher to suddenly implode. A home warranty can offer some financial protection for those unexpected...

Another Client Success Story - Nadia Hasso-Bradley

One of my first Las Vegas Real Estate clients was a wonderful couple looking for their future retirement home. They were getting calls left and right from agents since they visited so many sites online. I assured them that I had no intentions of bombarding them with calls or emails. However, what I did let them know th...

“But my Zestimate is higher than that”: 11 Things Sellers Should Know About Zillow's "Zestimate" calculations

Key Takeaways         Zestimates do not take the finishes or updates into account -- the insides of the properties.         Agents should describe to sellers how the Zestimate is calculated, and they can use the explanations on Zillow's own...

Down payment misconceptions continue to hinder millennials from owning a home

The misconception about down payments continue to hinder millennials from the possibility of owning a home.An outlook study conducted by United Shore Financial Services along with Michigan State University found out that a whopping 96% of its respondents became more interested in purchasing a home after finding out tha...

Leave a Comment

Have a Question?

Contact Us

Follow Us