How to do rent to own

[Jess Hammersley]

I have a tenant that has been in a property for about 5 years now and they are asking about signing the next contract for 5 years with a rent to own option. I am looking for any input on how to structure this deal and make both sides feel comfortable with the amounts. I still want to get good value out of the house.

[John Lubin]

I was having trouble selling a flip, so I just put a rent-to-own tenant in, which I got through listing on FB marketplace.  It was win-win. I get more cash upfront, cashflow after my cash-out refi, and I net more on the sale because no realtors involved.

Young family that the husband started a business 1yr ago so couldn't qualify for a mortgage, but they wanted to buy a home. 

-I gave them a 3yr option to buy at anytime

-purchase price increases 1.5% every 6 months

-They put $10k down (non-refundable) that will go towards their purchase

-They pay $1850 in rent.  And an additional $600/m for 1yr and $200/m for yr 2-3 that goes towards purchase (non-refundable).  The additional amount in yr 1 was to help decrease the initial downpayment

-Tenant responsible for all maintenance (but I did purchase them a home warranty to use)