Homes for rent back are usually made available by builders wishing to increase cash flow but keep a home in inventory for use as a model home. This model home will be open to potential buyers to help visualize their own home should they contract with the builder. If you purchase a home that the builder would sell and rent back from you, you stand to benefit in many ways.

First, you'll benefit because you are guaranteed income: a builder must pay you rent. This is actually much safer than entering into a conventional residential lease, because unlike a normal renter, the builder has a vested interest in making his payments on time. It wouldn't do him any good to be evicted from his model home!

Furthermore, model homes usually include the most expensive fixtures and fittings in order to show these to potential buyers. Because of this, you will find that the model home you buy will be the best quality home that the builder has available. Often, builders want to sell and rent back model homes and they are sold at a discounted rate because of this. This will enable you to own the highest quality home but for a far cheaper price than others would have to pay for a house with the same features.

An added advantage is the increased equity you build up. Frequently, these homes will be the first put up for sale in a completely new neighborhood. It is routine for builders to then raise their prices each month or at least each quarter as the homes in the various sectors are erected. Once you purchase a model home, your cost is fixed; and when the development finally arrives at completion, you will possess equity in an almost new house just like the ones that set your neighbors back thousands of dollars more.

Some shortcomings in this setup are immediately obvious. For one, you will not be able to move into your home right away, rather, you'll have to wait for an extended period of time, at least several months. Additionally, the new home you purchase will have had numerous visitors who have toured it before you occupy it, so wear and tear on your home might be noticeable. Suppose, however, that you want to move into your future retirement home a year or two down the road. If this is the case, this arrangement would be great for you. Moreover, developers strive to maintain the model home in good condition with regular cleaning and maintenance.

So if you have some time and patience and can put off moving into your new home, you can reap the benefits of a rent back arrangement. The increase in equity, added features and income opportunity will more than likely make it well worth the wait.