Do you feel that a commercial storage unit on rent is proving to be costlier than expected? Are you tired of paying the monthly rental? If yes, then the rent to own buildings with minimal down payment can be a better alternative. Storage buildings rent to own deals seem much like the typical home sales and are a substitute to the conventional home loans. However, they are not meant for everyone. The offers of buildings rent to own are for those who have no cash for buying and do not want to spend in rent for usage for several years.
So, what's on this page? Here's the quick navigation.
- 1 Overview of Rent to Own (RTO)
- 2 13 Reasons Why You Should Consider Rent to Own Buildings
- 2.1 Reason 1: No Need of Making the Full Payment
- 2.2 Reason 2: No More Spending for Clutter!
- 2.3 Reason 3: No Influence of Bad Credit
- 2.4 Reason 4: Appealing to Many Storage Space Seekers
- 2.5 Reason 5: No Obligation
- 2.6 Reason 6: No Penalty for Paying Early
- 2.7 Reason 7: Test Usage
- 2.8 Reason 8: Equity Building
- 2.9 Reason 9: Added Convenience
- 2.10 Reason 10: Versatility
- 2.11 Reason 11: Increased Property Value
- 2.12 Reason 12: Affordability
- 2.13 Reason 13: Custom Terms
- 3 More Benefits of Rent to Own Buildings
- 4 Conclusion
Overview of Rent to Own (RTO)
The concept of rent to own is a means to sell or purchase an item over time, offering the purchaser an opportunity to buy in future. In a conventional selling or buying scenario, the buyer purchases almost immediately after assenting the terms. However, rent to own varies, as the two parties agree to the likelihood of selling in future.
Finally, it is the buyer or renter who decides whether the sale would occur or not. Meanwhile, the renter pays to the seller. A part of these payments tends to decrease the amount required for buying the item at a later date. This is also applicable to storage buildings.
The Working of Rent to Own Buildings
The sellers usually offer one or more rent to own programs applicable to a storage building of any style or size. The entire purchase price is split into monthly payments, which is payable over 12 to 60 months depending upon the chosen program’s duration.
You are required to make the first payment, the down payment, at the time of buying. The rule of thumb is that the sooner you pay the remaining installments, the more are your savings on the final cost. For example, an early payoff can make you save up to 40% on the contract amount’s balance.
Here are some salient features of the working of rent to own storage buildings.
- Fully Negotiable: An RTO transaction or lease offer begins with a contract. The parties agree to a few terms, which are subject to change as per their needs. Depending upon what is critical or on priority for both buyer and seller, it is completely fine to request for some facilities or features prior to entering into an agreement. For instance, you may ask for a smaller down payment if it is helpful in managing your budget effectively.
- The Freedom to Buy: At the commencement of a transaction of rent to own buildings, the renter pays a premium. This is typically 5% of the final purchase price. However, it is likely to change and can be lower or higher. With this payment, the renter gets the option or right to purchase the home in future. However, there is no obligation.
- Custom Purchase Price: Both the parties predetermine a purchase price in the contract. Depending on the negotiations, the renter can buy the home at that price in the future, which is typically between 1 to 5 years. This is irrespective of what is the actual worth of the building. It is quite common to set a price that is more than the existing one so that the seller is motivated to overlook the benefit of selling today. If the building’s value rises faster than what was predicted, the buyer benefits significantly. Otherwise, he may probably not buy partly because it sounds insensible and partly because he may not get a lucrative large loan.
- The Need of Legal Advice: Due to the complex nature of the transaction and a significant amount of money involved, it is essential to get the contract reviewed by a real estate attorney. The offers of rent to own buildings involve substantial risk for buyers. This is perhaps why there are scams, which always attract buyers with poor credit and great hopes of purchasing a new home. In case you manage to get a reliable or an honest seller, there is a chance of losing a lot of money if execution does not happen as per the planning.
- Monthly Payments: A renter is responsible for paying on a monthly basis. These are rent payments, as the seller is yet the owner of the property and that the buyer pays a bit more per month. The extra amount is credited to the decided buying price, which alleviates the sum to be paid at the time of buying the storage building.
- Non-refundable Payments: The additional rent paid is non-refundable. This is because it reimburses the vendor for waiting to find out what the buyer shall finally do. After all, the seller cannot do anything with the property until the agreement ends. Practically, bigger option payments tend to increase the risk for the buyer. This is because if the storage buildings rent to own transaction does not happen for whatever reason, the money given is gone forever. The seller typically gets to keep any premium payments after a rent to own transaction ends.
- Custom Maintenance Terms: A nicely maintained storage building benefits everybody. However, the question is who shall pay for it. So, it is essential that the agreement mentions who is accountable for mundane maintenance and general repairs. Your agreement can have a clause that the buyer will pay for expenses under $500. However, the native laws can make it problematic by mandating that the owner shall offer a few amenities, regardless of what the agreement states.
Rent To Own Storage Buildings Programs Overview
Rent to own programs provide the required storage space without renting a storage locker. It is true that not all have money upfront to buy a storage building outright. So, these programs enable renting the desired building on a monthly basis. When you fulfill the agreement terms, you become the owner of the building. You can cancel the agreement anytime without any fee in case there is no longer the need of such a building. If you fulfill the agreement’s terms, the building becomes yours.
Most programs for rent to own buildings are without a credit check. These offers of storage buildings rent to own no credit check are for those who cannot arrange for loans for payments, as they do not have a good credit score.
There are a few companies that allow selling the building back during the program’s term in exchange for a different building and a new contract. This simply increases the buyer’s options in terms of functionality and style. For example, the buyer can now choose a program for rent to own metal buildings or rent to own portable buildings.
Through such programs, buyers can enjoy the convenience of an on-site space for storage while paying fees similar to an off-site one. They can speed up payments at any time to alleviate the due final balance. Rent to own programs are especially for those who predict to be in a stronger monetary position within some years.
Why Rent to Own is Better than Renting?
Renting a storage space has a few limitations, which rent to own deals easily tend to overcome. So, let’s first take a look at these cons or limitations, which are as follows:
- No ownership of a buyer; lifetime on rent only
- Limited privacy
- Inconvenient access due to not within your property area
- Less chance of custom way of arranging things
- Chances of moisture problems (concrete flooring)
- Restricted usage to storage
Below are the pros of rent to own buildings, due to which they prove to be better than renting deals.
- Ownership to buyer max after five years and min after two years
- Anytime access
- Building on your property
- Privately located in your own yard
- High chances of customization by adding shelves and other storage containers
- No moisture problems, as the floor is mostly of wood
- Multi-purpose usage possible, as a storage, workshop, or a hobby centre
- Adds to the overall property value
13 Reasons Why You Should Consider Rent to Own Buildings
Just because the storage buildings rent to own no credit check offers are more beneficial than the rental ones, it does not mean that they are the best. You should convince yourself that they are truly the best in the situation of a financial crisis as well as most useful when there is too much stuff to store at home. So, here are 13 reasons to consider RTO offers.
Reason 1: No Need of Making the Full Payment
One of the biggest persuading reasons for going for rent to own storage buildings is that you do not have to pay in full at the time of agreement. Instead, the agreed upon purchase price is split into multiple monthly installments. This may cover a minor amount of interest.
Such deals are ideal for those who are paying rent for an off-site storage building without any option to recover the loss. An RTO program is more beneficial, as it makes you own the building at the end of the rental contract.
A buyer easily gets a chance to lock in the purchase price. With the rising building prices, buyers can buy at the current price although the purchase shall occur in the future. They even have the option to withdraw in case the prices drop. However, it shall depend totally on the amount paid, whether withdrawal will sound sensible or not.
Reason 2: No More Spending for Clutter!
Most people tend to love their stuff. Similarly, they are great fans of activities that involve tools, decorations, supplies, and memorabilia. Sadly, all of them can end up being stuffed in closets or corners, where it is tough to get to or very simple to forget.
At that time, when these items result in too much stuff, we call it as clutter. In the U.S, almost 10% households go for a rental offer as per the Self-Storage Association. While a few use such a storage for handling provisional changes, most have them for more space. No matter what the reason is, a durable storage building is a great means of arranging your belongings and get rid of unnecessary and outdated items.
However, a rental storage for storing the clutter is likely to take money from you each month until you are alive. This is true in case you need an extra storage place permanently. Nevertheless, a rent to own option is a more efficient option in this scenario.
You continue to pay for some months and then own it to manage all your belongings on your own property. Instead of hiding them far away, the things to be kept are now stored in a systematic manner and managed in front of your eyes.
Reason 3: No Influence of Bad Credit
This is perhaps the biggest benefit of rent to own buildings. Buyers who cannot succeed to get a loan due to a bad credit score can now easily buy a storage facility via a rent to own agreement. Meanwhile, they can strive to rebuild their scores to obtain a loan when the time finally comes to purchase the storage building.
Usually, a hard credit inquiry is likely to bring down the score further. In this, a financial institution checks whether you are a good applicant for a loan. So, no inquiry is not likely to affect your credit score.
Reason 4: Appealing to Many Storage Space Seekers
Rent to own metal buildings or rent to own portable buildings are ideal for countless storage space seekers who fit into one of the following categories:
- Short-term Storage Space Seekers: Anyone who needs a storage space for a short period, an RTO agreement is a feasible option in terms of time and money. These people seriously cannot spend time in looking for rental options due to lack of time or standard purchasing options due to lack of money. They are mostly in the process of moving to another place.
- Seekers of Better Self-Storage Alternatives: Anyone who wishes to rent a storage space at someplace, RTO seems to be an alluring alternative. This is because you obtain the same storage area for the same money but with the tempting benefit of having it in your own yard and owning it after some months.
Reason 5: No Obligation
As a buyer, there is no obligation for you to buy. Financial volatility is indispensable. In case of a loan, defaulting on a payment badly hits your credit score. This makes you recognize that you did not meet your obligation. However, with a rent to own deal, you can quit the monthly rental without paying any penalty at any time. So, there are no hard feelings and no obligation and the edifice is returnable without any question. It is not at all obligatory for making the next payment.
Reason 6: No Penalty for Paying Early
While you can conveniently pay all installments over the decided period, you can also pay before time. If you do so, there are no penalties or extra charges levied on you. In fact, you can significantly reduce the final purchase price, which you will be paying at the time of buying. So, if you wish to pay before the expiry of the contract, it is truly beneficial. There is no pre-payment punishment.
Reason 7: Test Usage
As a buyer, you can easily use the storage building before committing to purchase it. This is a plus point, as you can easily learn about the prevailing issues before it is too late.
Reason 8: Equity Building
In principle, renters or buyers do not have a chance of building equity, unlike a homeowner. Nevertheless, payments can accrue and offer a substantial amount to be put toward the building’s purchase. It is possible to save through a savings account and use it to buy a storage building.
Reason 9: Added Convenience
Are you a keen hobbyist who likes to work on a woodworking project? Do you wish to enjoy kayaking this weekend? Well, with an offer for rent to own buildings for storage, there is no need to rush anywhere for the equipment. The gear is already in the rental building perched on your property. This means you need not drive to the storage facility.
Another convenience benefit that you enjoy is of moving less. If you are committed to a storage building in your neighborhood but are unable to purchase it right now, you are finally renting a storage space that you will finally buy. As a result, the cost and inconvenience of moving from one storage building to another at fixed intervals are eliminated.
One more convenience benefit comes to you if you go for rent to own portable buildings. The benefit is in terms of usage, which is analogous to owned portable storage spaces.
Reason 10: Versatility
A rent to own storage building, although on rent, can be used in a variety of ways. This is something pure rental storage facilities do not offer. While you are paying to own it later, you can use the RTO building just as you have owned it. Apart from a storage space, it can be your studio, home office, potting shed, barn, or even a garage. It can be your hobbyist or activity centre.
Reason 11: Increased Property Value
No matter how valuable your home is, clutter is a prime drawback. However, if you bring all that clutter into one of the rent to own metal buildings, it will not only make your home clutter free but also increase the overall property value.
Reason 12: Affordability
Most companies offering rent to own buildings provide affordable monthly payments. There is even a provision for a low down payment in case you are facing a financial crunch. You can opt for a bigger down payment if you wish to alleviate the monthly payment amount.
Basically, the most cost effective way to buy a storage building is to pay full while purchasing it. However, on the other hand, by harnessing the benefit of an RTO program, you end up paying more in the long run. Still, this price is much more affordable than the commercial storage rental fees that you will end up paying for that period.
Further, while you keep paying monthly, the building is in your yard. At the end of the term, the building becomes yours. This makes this deal ideal for those in need of an instant storage space but lack cash to pay its full price.
Many think RTO deals are costly. However, the cost per month is akin to that of a rent paid for a storage facility that can never be yours. The dissimilarity is that you can have that storage building in your name after a couple of years instead of continuing to pay for something that will always be a public storage.
Reason 13: Custom Terms
You choose a program plan that seems to be the most suitable one to you as per your needs. The program’s term varies from 24 to 60 months, which you are free to choose. You are also free to select the date of payment. Both choices are available in any size or shape of storage buildings.
More Benefits of Rent to Own Buildings
- Immediate approval from the seller
- Month to month contract, meaning no long contract
- Termination of contract at any time by you
- Easy to apply
- No risk of lowering your credit score
- Moveable if you decide to move somewhere else
- Rent possible even if no cash in hand (through credit card)
Rent to own buildings are not suitable in all conditions and for every individual. It needs proper assessment of one’s financial situation as well as needs along with proper research for selecting the bets company or an offer. The latter is for making the deal more affordable as well as reliable. Go for RTO if you wish to save now but have an assurance that you can significantly earn and spend more in future. Only then an RTO program is an effectual deal for you.