Rent To Own Vs. Steel Building Financing - Simplifying The Buying Options

Rent To Own Vs. Steel Building Financing - Simplifying The Buying Options

Who would want to go wrong with finances? Especially when you buy big. So, how do you make financial decisions when it comes to metal buildings? After all, they are heavy investments. Buying a whole property with just one down payment is not really an option for most of us. So, what to do in that case?

Now, you must be wondering how much loan you will have to pay to buy a metal building. Come, have a look at some data available. An average mortgage payment is $2,823 on 30 year fixed & $3,724 on 15 year fixed loan. According to the US Census Bureau, an accurate number would be around $1,672 per month for an average American to spend on a loan in 2021 [source: website].

But a loan is not the only thing that you have to pay. There are a couple of other payments, like property taxes, insurance, utility bills, etc., that you need to pay on a monthly basis. The good news is that you can save on your steel buildings' insurance & utility bills by following some simple steps.

Thankfully, there are two ways by which you can choose mortgages for your steel buildings.

What Is Rent To Own Metal Buildings?

It is a legal contract between a metal dealer and a buyer when buying any metal structure. Consider it as one of the various available options for a loan. It is also known as lease purchase, rent to buy, or rent to purchase.

Did you know that 67% of buyers who rent to own actually want to buy the product at the end of the lease & 58% of people who rent to own end up buying the product? A 2021 report mentioned that the US rent-to-own market was valued at $10.48 billion and is expected to reach $15.53 billion by 2027 with a compound annual growth rate ( CAGR ) of 6.77%.

So, How Does It Work? Let's see…

  • Basically, you pay the rent of the building that you have purchased, along with an option to buy it after the lease expires.
  • You are given the option to buy it before it is available in the market. Remember that there is no obligation to buy the metal structure after the lease has expired.
  • Usually, the time period of the lease is around one to three years.
  • Here, the seller might ask you to pay an initial down payment of 3% to 7% of your building price.
  • By the end of the lease, you can either pay the remaining full price or you can opt for a mortgage.
  • Ensure that you read your contract thoroughly, along with the fine print, before opting for rent to own.

RTO Is Of Two Types

Lease Option – you can opt out of buying the building when the lease is over. Then, the seller will put the steel building on the market for sale.

Lease Purchase – you are obligated to buy the steel structure after the lease expires.

Pros:

  • You don't have to pay the full price of the metal structure at once.
  • It is an excellent option for people who do not qualify for a mortgage initially.
  • RTO gives you time to build up your credit score to apply for a mortgage on your metal building in the future.
  • You have an option of not buying if case you change your mind.

Cons:

  • You have to pay some initial amount as a down payment.
  • You might have to pay for repairs and maintenance.
  • If you choose to avoid buying, you may end up losing the money that you have paid.
  • You need to check for all loopholes, your contractor's financial stability & amount that you need to pay on a monthly basis.

How Can You Apply For Rent To Own Metal Buildings?

Contact your steel building seller to get details on how to RTO. Alternatively, you can hire a real estate expert to know more about the deal in layperson terms. In case you need any help, contact Carport Advisors for the best deals.

Do check all the legal documents & deals before signing up for one.

What Is Steel Building Financing?

You get a direct mortgage from either a bank or a mortgage broker. You will have to pay on a monthly basis. Remember that a mortgage broker may charge you some consultation fees. Remember to check their license before getting into any deal.

Pros:

  • Your bank already has your customer record, so it will be less stressful and easy to apply for a loan via banks.
  • Your loan can get approved faster.
  • The interest rate is fixed chiefly & steady per month. You need to check with your bank in this regard.

Cons:

  • You need to have a good credit score to apply for bank loans.
  • Your debt will go on for a long timeline.
  • Fee and other penalty can be high.

What Are The Ways In Which You Can Apply For Steel Building Financing?

You can ask your bank directly to lend you money to buy the metal building. The best thing is that the steel industry is thriving and expected to grow at a CAGR of 1.7% to reach $14.4 billion by 2024. This means your property value will also increase with time.

Which Is Better: Rent To Own Metal Buildings Vs. Steel Building Financing

Unfortunately, there is no direct answer to that question. It all boils down to the specific personal budget, needs & present situation of an individual. However, if you want to know more about rent to own metal buildings, you can contact Carport Advisor's sales team. We are here to help you & offer you the best possible price.

How Much Will You Have To Pay On A Monthly Basis?

Here are some examples of monthly payments for different building costs.

Building Total CostTermMonthly Payments
$15,000 5 Years $332.85 per month
$35,000 5 Years $773.15 per month
$50,000 5 Years $1,085.50 per month
$100,000 7 Years $1,649.44 per month
$200,000 7 Years $3,298.00 per month

Get Your First Metal Building With Carport Advisor Today!

Your needs may vary; your credit score may vary, but what remains consistent throughout the years is Carport Advisor certified galvanized steel buildings. Get one for yourself today and increase the value of your property. Call Carport Advisor, and we will help you sort out designs & accessories.

Call us now and let one of our metal building consultants help you to design the building of your dreams at an competitive price.

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