Rent to Own Scams

It's sometimes embarrassing to tell people that I arrange for property ownership through a rent to own program for my clients. There are hundreds if not thousands of people out there purchasing property and then advertising in every media stream to be able to book as many appointments at one time in order to create a frenzy. A prospect falls in love with the property, they're asked how much of a deposit they can get, well they muster up $5000 or $10,000, usually after going to a bank and taking a cash back on their credit card. So a couple is trying to get ahead and decide to take the rent to own approach only to further get into more debt.
Don't provide deposits till an offer is made but make sure it's favorable. Most rent to own always place a 6% appreciation compounded. I reduce the percentage by 1 for every $5k deposit. A deposit of $10k can be a saving of over $4k on a @210k property. A deposit is not needed but when searching for a property, look for a property that is a little undervalued. This will work very favorably at time of buy out. If you're purchasing a place that is being viewed by the landlord, check out what the buy out is and what are properties presently selling for in the area.
This is an important point to pay attention to; watch out for the appreciation placed on the property. A lot of these Rent to Own experts are nothing more than opportunist, they start at a price higher than the value of the house, then they add the closing and mortgage insurance so by the time you add a few years of compounded interest, the property is the most expensive one on the block. The tenant has paid more per month and now can't see the sense of purchasing the property at this high level. The other thing that can happen is that the lender advises the want to be owner that the property was appraised for much less than what the vendor is requesting. This works in the hands of the owner of the property.
I work with my clients so they can gain ownership and I can share success stories for future prospects. The start up of the property is based on the cost that I purchased it at. I place a fair appreciation amount each year depending on the current economic climate.