TenantBuyerList.com builds lists of tenant/buyers that are searching for "rent to own" homes nationwide. Often, home owners and landlords will ask us if we have buyers for their particular home. The answer: It depends. Watch the informative video here to get the full answer and see if selling your home, rent to own, is right for you.
Naturally, when you sell your property, "Rent-to-Own," you do so with the hopes that the tenant-buyer will actually exercise their right to buy the home, called the "Option" and cash you out.
But it doesn't always work out that way, right? In fact, some estimates have it that 30-50% of tenant-buyers actually exercise their Option to buy property. So what should you do? Your tenant-buyer calls you and says something like...
" Hey... sorry but I can't buy your house now"
...or they might say... " Hey... sorry but I don't want to buy your house now " After all, it is the "Option" to buy and the "Option" not to buy, right?
Alright Timeout.
Let's Consider the Following...
With the clear understanding that most sellers we will work with would really prefer to sell their home at a fair price in today's market and get fully cashed out, let's take a look now at the alternative options available, assuming getting cashed out is not possible for one reason or another.
What You Get with a Conventional
Tenant and Rental
With a conventional tenant and rental, you get from your tenant:
What You Get When You're Selling Your Property,
"Rent-to-Own" On Terms ...Instead of for Cash Today
With a non-conventional Lease-Option ("Rent-to-Own") agreement, you get from your tenant-buyer:
Let's Look At The Worse Case Scenario
If Your Tenant-Buyer Were Not To Buy
Assuming your tenant-buyer did not exercise his or her Option to buy your property, and assuming they've made their monthly payments on time for the entire term, you could simply take the property back.
You could then "repackage" the property and sell it again and possibly at an increase in value. If the property has gone up in value during the lease term, and the tenant-buyer decides to give you the property back, you can always sell it again at a higher price. Or, you may decide you want to keep it as a rental for cash flow and continued appreciation. If the tenant-buyer fails to make their payments on time, however, you could always evict them as a Lease with the Option to buy is not a sale, contrary to people who are confused with the Dodd Frank law, etc. Since a Lease with the Option to buy is not a sale, but the Option to buy the property (and the Option not to buy it), the owner of the property, you, can evict the non-paying tenant-buyer just as you would if you were to lease the property (only) like a landlord does. In essence, you get the benefits of:
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AuthorRichard Israel is a seasoned, wholesale real estate investor specializing in creative seller financing exit strategies. ArchivesCategories
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