Appreciate How Your RTO Price is Set

Today’s top rent to own tip:

Appreciate how your future purchase price is set:

Ask what appreciation rate will be used to calculate your future purchase price. If you ask no other questions but this one, you will be miles ahead of other homebuyers who jumped into a RTO arrangement on blind faith. Many private investors and RTO companies may apply a standard appreciation rate that can be as high as 6 or 7 percent per year. Watch out! This may inflate the price you pay for your house in the future.

In reality, many areas will have lower annual appreciation rates than 7 percent. Properties in the downtown core often appreciate at a different rate than homes in the suburbs, and homes in urban areas may appreciate faster than in rural areas.

There are ways to determine what the fair appreciation rate should be. A professional REALTOR® can assist, if you’re looking for an objective opinion. They can help evaluate how homes are selling in the area. They can also illuminate trends and development plans that may add value to an area.

To get more details you can contact the planning and development government offices in the areas where you are house hunting. Once you have a better idea of the fair appreciation rate for the area where you would like to own, ask the investor what annual appreciation rate is being used to determine the future purchase price of the house.

You should make sure you are not overpaying for the house at the end of your RTO term before you commit to anything.

Curious about a house price now or in the future? Reach out by booking a call!