In his latest piece for Realty Times, Atlas Co-Founder and Owner Ryan Boykin discusses the 1 trendy solution to millennial homeownership problems—a rent with right to purchase (RTP) or rent to own (RTO) program.
“Millennials were the largest group of U.S. home buyers in 2016, according to Zillow Group Report. Nevertheless, they still lag behind previous generations by about three years in the age at which they are becoming first-time homeowners.
The solution for many aspiring homeowners, of any age, is renting. For example, even if they have enough for a down payment, 62 percent of millennials shop for a rental while looking to buy a home, according to a survey cited on CNBC. However, deciding to keep renting does not get them closer to their goal of purchasing their own residence.
Instead of just renting to buy time until inventory improves or building a down payment fund, prospective homeowners may want to consider a rent-to-own (RTO) option.
These agreements can be excellent alternatives for those who want to get into a home but are not financially ready to become homeowners. This helps them lock in the home they would like, improve credit worthiness and, with a percentage of rent going toward the purchase price, build some equity in “their future home.”