Sell/Rent/Rent To Own

[Roy Gutierrez]

Hello gang,

I have a 3 bedroom 1 bath house, great location close to a very desirable area but horrible location to get in and get out (right where cars get off from the highway), no AC and old furnace, going to replace the furnace and going to consider installing AC if it's cost effective, renters are leaving at the end of this month. I currently rent it for $1,100 but was thinking of selling it so I can invest in a higher end house, I bought it for $29K, put $45K, my realtor estimates I can sell it for $90K which is to low for me, I might be able to take 100K after closing costs and commissions so selling might not happen, I will probably just milk the cow for a long time or one other possible option is to turn it into a vacation rental (which I'm very experienced by now).

The renter leaving just came to me asking about Rent To Own, just started reading about it because I had no idea how that worked. So basically I'm thinking I can offer something like this:

The rent will be $1,450 for 3 years, if they make all payments I sell the house to them for $90K.

or

The rent will be $1,600 for 2 years, if they make all payments I sell the house to them for $90K

I still don't know what is the process/options to sell after the lease period, what is your experience for you guys doing Rent to Own?

Thank you,

Roy

[Chris T.]

Rent To Own Homes: How to Profit from a Lease Purchase

Podcast 185: How “Rent-to-Own” Can Increase Cash Flow and Maximize Equity with Bill Powers

I use 2 documents. One standard lease, plus the option agreement. 

I direct the tenant buyer to my loan officer to make sure they can qualify for a mortgage in a few years, then I charge a non-refundable option fee.