Rent to Own Connecticut Apartments

Finding rentals with an option to purchase are tough to find, but they do periodically hit the market. Contact Amo Realty for up to the minute listings and more info about finding rent-to-own properties across Connecticut.

Apartment living boasts many advantages over single-family home ownership, especially in areas like Fairfield County, which has one of the fastest growing populations in Connecticut. Apartments often include free fitness centers, lounges for large gatherings, private recreation spaces, and freedom from yardwork. With fewer responsibilities around the home, it’s easier for many to get out and explore cities like Danbury.

Not everyone who loves apartments enjoys renting, though. Rent to own apartments offer long-term renters a different way to become homeowners. While apartments aren’t listed for sale as often as single-family homes, they do appear on the market, even in markets as competitive as New Haven and Bridgeport.

In this article, “rent to own” refers renting a home with intent to buy it at the end of a lease. It’s important to note that while this phrase is colloquially used by landlords, sellers, and service providers, Connecticut law technically restricts rent to own contracts to personal property, not real property. “Real property” refers to land or permanent structures. A permanent structure like an apartment requires different paperwork.

Rent to own contracts essentially sell property in advance. These arrangements typically follow three simple steps. First, potential buyers pay an option fee. This small, upfront payment is usually 1-7% of the property’s value. If you want to buy a $200,000 apartment in Harford, you should expect an option fee between $2000 and $14000. Once the option fee is paid and you move into your leased apartment, you’re responsible for rent credits, also called rent premiums. A rent credit is a fee added to your regular rent that is saved towards your future down payment. The fee depends on individual landlord preferences and key figures like the length of your lease, anticipated financing, and percentage paid via the option fee. Finally, at the end of the lease, the potential buyer secures a mortgage, puts their rent credits towards the down payment, and officially purchases the property from the landlord.

A rent to own contract for an apartment is usually called a lease purchase or a lease option. The difference between these two terms is simple. In a lease purchase contract, the potential buyer must buy the property at the end of the contracted lease. In a lease option, the potential buyer has the option to buy the property at the end of the contract. A lease option lets you decide if you want to buy the property, and a lease purchase mandates it.

Breaking a lease purchase contract forfeits all the rent credits you’ve accrued and your option fee. You also risk being sued by the landlord. If you choose not to buy at the end of a lease option contract, you’ll still give up your option fee, but you may be able to negotiate for the return of rent credits before you sign. Besides the different expectations at the end of the contracted term, these leases essentially function the same way.

Entering a rent to own contract suits buyers who have spent most of their lives renting. It secures a place to live while you decide if the property is a good fit for your lifestyle. Lease option contracts also appeal to people developing their credit rating. This suits a lot of renters, because rent payments are rarely reported to credit bureaus, and not all scoring models consider rent anyway.

Imagine you’re making enough money to pay a mortgage, but your long history of timely rent payments means nothing to your credit score. Instead of paying rent and saving for your future apartment in Greenwich separately, you can start investing in your home while your score rises.

If you can comfortably pay a little extra on top of regular rent this approach may be right for you. This is especially true for those actively working on their credit who can reasonably expect to qualify for a mortgage in two or three years. Timing is everything in a lease.

It’s important to remember that purchased apartments come with different, continuing fees and costs than a single-family house. If you own a house, you’re responsible for all maintenance, utilities, and taxes in addition to potential homeowner association (HOA) dues. While an apartment owner rarely has to cut their own grass, you will have building association, utility, and maintenance fees. You’ll likely pay additional charges to help maintain the complex.

Property taxes still apply to apartment owners as well. In fact, you’ll likely pay a share of the property for common areas in addition to your private unit. When you’re determining where to settle, check local mill rates. Mill rates determine how much property tax you will owe every year as a property owner, and there’s a big difference between Stamford and Waterbury.

Always read contracts carefully. Two neighboring apartment complexes in New Britain will have different expectations and permissions for unit owners. Review state, county, city, and development regulations. If possible, consult with a lawyer or real estate expert before signing anything. The small details in a rent to own contract help protect the renter’s easy transition into home ownership.