3 ms·

Ask HN: Rent-to-own idea practical?

• jacquesm 17y ago
  That many contracts don't allow you to do that ? For instance, I have a house on the market right now waiting for it to sell (tough luck!), but I'm not allowed to let it to someone else because of contractual provisions by the bank that holds a partial mortgage.
• osipov 17y ago
  Competition. I believe in English this business model is called "mortgage"
  • ph0rque 17y ago
    Thanks for this English word. I believe there is a large number of people who don't want to buy a house in a particular area (either because of the fact that they'll be moving in a few years, lack of any sort of downpayment, or other reasons), but still need to live somewhere (and can afford to pay a certain monthly amount). This would be the market this service would be aimed at.
    • ErrantX 17y ago
      I'm still not sure I understand. Based on your other comment here your not proposing a huge network of houses etc. In which case the only difference with a mortgage (and changing mortgages) is a little less paperwork/legwork. Or am I missing the point?
      • ph0rque 17y ago
        To clarify, this hosting company doesn't go out and buy houses to then lease out... they would vet the mortgage in the beginning (or a customer would go to the bank to get a pre-qualified mortgage, if those things are still given out by banks) and when the customer moves, the company assumes ownership of the house to lease out to other customers or sell as it sees fit... I guess that risk on the company might be too much to assume.
• poppysan 17y ago
  It could work. What would need to happen in order for its viability is the host company needs to either own or have management over a number of residences. They would also have to have partner banks or provide the loans themselves. It would work like this: Company owns 250 homes in your target city. You get guaranteed for a mortgage with them in advance. Then you select from their properties one that you like. If the property does not fit your needs, you can transfer, after a year, to another one of the properties, with a small moving fee, to another home in the network. Would take loads of money to accomplish but would be neat~!!!
  • ph0rque 17y ago
    That was my thought initially; however, the more I thought about it, the less I think it would be a requirement. There are condos/townhouses pretty much everywhere; as you mentioned, the only additional layer needed is the mortgage with a bank (or even a p2p lending service like prosper.com).
    • poppysan 17y ago
      Another option could benefit renters, but would be hard to pull off. For renters without a down payment, or that don't qualify for a loan can rent a property, and an additional amount will be added to rent. If they fulfill the terms of the lease, the good credit from the payments and the cash from the overpayment of rent will be applied to purchasing the home. Rent would be kept low with the promise of purchase after a given period. But if the renter breaks the lease, the owner keeps the full accumulated rent (so removing the discount).