Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 4 years ago,

User Stats

22
Posts
5
Votes
Ben Chapman
  • Detroit
5
Votes |
22
Posts

Seeking advice on a rent to own deal

Ben Chapman
  • Detroit
Posted

This is the perfect place for advice so here goes:

I am relocating for work very soon, 3 weeks. I do not have time for the back and forth of listing my house and trying to sell it. I have only been in the house for 15 months so I have very little equity. It is a very unique property. It is almost 4 acres with a 3100 sqft house, 1200 sqft garage and 1500 sqft workshop. I bought the property last year in order to expand my side business. I overlooked a lot of little things because I only wanted the property for the land and workshop not necessarily the house. I paid 440k. A realtor I spoke to suggested listing at 475 and being prepared to accept 465 based on comps. If that's the case, the fees will eat up some of the money I put down originally. I also put 10k into the work shop for improvements. I am not afraid to rent out the property. I'm asking $2600 to include water and a pool cleaning service. I am trying to get the most money down in a lease option so I can buy another house where I am moving too. 

What is a fair price on a 5 year rent to own? I was thinking a 4% increase in price every year to account for appreciation. Year 1: 483,600 Year 2: 502,944 Year 3: 523.061 Year 4: 543,983 Year 5: 565,742. I'd give the tenant the option to buy every 12 months at those prices based off 4% increase on original price of $465,000. I would give a rent credit toward the purchase price of $1,000 per month. 

With 5k down and a $1,000 rent credit each month toward the purchase price, the tenant would end up having to get a mortgage for $466,600 after year 1, $473,944 year 2, $482,061 year 3, $490,983 year 4 and $500,742 year 5. 

Do these numbers make sense, am I asking to little, too much? Not enough rent toward sales price, too much? 

Thanks for any and all insight!!!

 

Loading replies...