Rent-to-own homes are a risky venture for tenant’s, but they know what they’re getting into… sometimes.
The New York Times examined a firm named Vision Property Management that deals with rent-to-own properties. As the landlord, Vision collects rent, but tenants are responsible for all repairs.
Vision buys cheap, distressed properties from the bank (many of which are homes valued at around $10,000) and then markets buyers who can’t afford house loans. In many cases, tenants sign on with Vision without knowing all that’s at stake: That they are renting homes that could have no heat, no water, and could need serious, and costly, repairs.
Rent-to-own leases are similar in many ways to contracts for deeds: long-term, high-interest installment contracts that call for the resident to make monthly payments to the seller. At the end of a Vision contract, tenants still need to find financing to complete the deal. Tenants who are evicted during the tenure of these seven-year contracts walk away empty-handed, receiving no credit for money spent on repairs or renovations.