Time was, in Georgia and the United States, when families would buy things on credit: appliances, furniture, luxuries – you name it. Few had the available cash to pay in full up front, so they would pay in installments. If they missed a payment, the store could send a representative out to repossess the item.
Although the practice has not entirely died out, credit cards and higher standards of living have lowered its prominence. Still, the principle is alive and well with a large segment of aspiring homeowners. As home values rise, rent-to-own programs are becoming a mainstream alternative.
Home Prices in Georgia
The entire U.S. has seen a lower inventory of available homes in recent years. The sales prices, therefore, have risen commensurably. In 2021 alone, Georgia's inventory declined by a measure of 27 percent while the average sales price increased by 13 percent to $356,386. Demand has reached such a fever pitch that the number of days a property remains on the market have decreased to only 22 days.
With such a lopsided sellers' market, buyers feel at the mercy of economic forces beyond their control. They look for a vehicle that can make them more attractive to owners, especially if their credit scores are sub-optimal.
Read More: How to Buy a House With Bad Credit in Georgia
What Does Rent-to-Own Look Like in Georgia?
What distinguishes a rent-to-own lease agreement in Georgia is the option to purchase. This section typically includes an agreed-upon purchase price as well as the terms of sale. In short, it combines the features of a lease and a sales contract.
Very often, there will be some form of consideration, such as money down, to keep the purchase option in place. In addition, the option will have an expiration date since sellers are rarely interested in being permanent landlords. The months between execution of the lease-purchase agreement and the exercising of the purchase option allow buyer/tenants to save money and build credit.
Read More: Rent-to-Own House Agreements
Are There Programs to Help?
Those looking for government rent-to-own programs will have to look long and hard, and then give up. While the state Department of Community Affairs offers much by way of downpayment assistance for traditional purchases, the best rent-to-own programs in Georgia are found in the private sector. This makes sense since these are owner financing arrangements where the seller is also your bank.
One such service is Path Home GA, which maintains a large database of homes for sale where rent-to-own scenarios are welcome. Each property on its website is geared toward buyers who are credit-challenged or otherwise unable to afford an immediate purchase. This organization also helps clients with down payment assistance and grocery expenses.
Dream America offers a different take. This group actually allows qualified applicants to select their home in consultation with a licensed Georgia Realtor. At this point, Dream America will purchase the house and accept rental remittances on it for a full year while the tenant becomes fit to receive a mortgage loan. Once the loan is settled, Dream America is paid off.
Berkshire Hathaway Home Services in Georgia maintains its own portfolio of properties from which an interested party can choose to rent for a three- to five-year term. At the end of that time, the tenant has the option to purchase the property from Berkshire Hathaway.
Read More: Are There Grants for Buying a Home?
Avenue to Ownership
These enterprises and others put you into an affordable rent-to-own house and provide you with an avenue to ownership. When the time comes to buy, the purchaser is in a stronger financial position to do so.
Adam Luehrs is a writer during the day and a voracious reader at night. He focuses mostly on finance writing and has a passion for real estate, credit card deals, and investing.