by Larry Alton
You’ve probably heard other landlords talk about rent to own agreements in the past, but have you ever considered entering into one with a current or prospective tenant? This sort of setup can afford you many benefits over the course of the agreement.
How Does it Work?
In most situations, real estate investors either rent out a property or sell it. But if you have a property that’s currently being leased by a tenant who’s interested in one day owning real estate, then you may consider the rent to own option.
“Rent to own, also know as lease to own or lease option, is an alternative to traditional renting or buying,” Rent to Own Labs explains. “You could even think of it as a fusion of both, since rent to own is basically just leasing a home until you become eligible to buy it.”
5 Benefits for the Seller
At first, rent to own agreements may sound complex and overrated, but they’re actually fairly easy to setup. Unbeknownst to many, these agreements also benefit the seller just as much (if not more) than the buyer. Check out a few of the specific advantages.
1. Higher Sales Price
If you’re trying to sell your property in a soft market and are having trouble, renting may be your next best option. But you may also find that a rent to own agreement is enticing to individuals who can’t afford to buy a home at the moment. With a rent to own agreement, you can offer a very convenient method of financing to tenants/buyers. As a result, they’ll pay a premium.
2. Better Tenants
You’re going to get better tenants when you have a rent to own agreement in place. They know the property will one day belong to them and will therefore have its best interests in mind. They’ll take better care of things, maintain the yard, and respect the neighbors. This creates fewer headaches on your part and is worth its weight in gold.
3. Guaranteed Occupancy
If you set up a rent to own agreement that lasts for five years, you essentially have guaranteed occupancy for that period of time (unless they back out). This reduces the burden of vacancy and turnover rates and helps maximize cash flow.
4. Minimal Risk
There’s virtually no risk for the seller in a rent to own situation. For example, if a tenant/buyer backs out of the agreement after a couple of years, you still get to keep the property and all of the escrow money that they had put forth for the sale of the home.
As Fox Business notes, “Sellers can even have the buyer agree to handle all home repairs and maintenance, placing the burden on the renter if anything goes wrong with the house, and alleviates the need for the seller to act as landlord.”
5. No Commission
The commission on the sale of a home can total thousands of dollars. For example, if you’re selling a property for $200,000, it’s likely that you’d owe your agent $6,000 at the closing table. With a rent to own agreement, you don’t need an agent and can keep more of your money.
The Best of Both Worlds
As a landlord, don’t immediately shrug off the idea of a rent to own agreement. While you may not be pursuing the sale of one of your properties right now, consider this type of agreement as a mutually beneficial option when you’re OK with the idea of unloading a property in the future.
Would you consider a rent to own agreement? Why or why not?
Let me know with a comment!
Interested in Finding out More? Reach out below
Address: 1415 Main St. #823, Grandview, MO 64030
Ireland Investments llc
This information is intended only for the use of the intended recipient(s) and it may be privileged and confidential. Please note that any views or opinions presented in this post are solely those of the author and do not necessarily represent those of the company. This is reposted information and is not original thought of Ireland Investments or anyone associated with the business.
Popular areas we service;
Kansas city Missouri, overland park Kansas, Kansas city Kansas, Olathe Kansas, Independence Missouri, Shawnee Kansas, Blue Springs Missouri, Lenexa Kansas, Leavenworth, Kansas, Leawood Kansas, Liberty Missouri, Raytown Missouri, Gladstone Missouri, Grandview Missouri, Belton Missouri, Prairie Village Kansas, Gardner Kansas, Raymore Missouri, Grain Valley Missouri, Ottawa, Kansas, Lansing Kansas, Excelsior Springs Missouri, Merriam Kansas, Harrisonville Missouri, Cameron Missouri, Mission Kansas, Kearney Missouri, Smithville Missouri, Pleasant Hill Missouri, Oak Grove Missouri, Bonner Springs Kansas, Roeland Park Kansas, Parkville Missouri, De Soto Kansas, Richmond Missouri, Greenwood Missouri, Paola Kansas, Basehor Kansas, Tonganoxie Kansas, Odessa Missouri, Peculiar Missouri, Platte City, Missouri, Higginsville Missouri, Lexington Missouri, Edwardsville Kansas, North Kansas City Missouri, Osawatomie Kansas, Louisburg Kansas, Fairway Kansas, Mission Hills Kansas, Sugar Creek Missouri, Riverside Missouri, Buckner Missouri, Pleasant Valley Missouri, Lawson Missouri, Plattsburg Missouri, Lake Lotawana Missouri, Weatherby Lake Missouri, Wellsville Kansas, Edgerton Kansas, Westwood Kansas, Garden City Missouri, Gower Missouri, Claycomo Missouri, Lone Jack Missouri, Drexel Missouri, Lake Tapawingo Missouri, Glenaire Missouri, Dearborn Missouri, Avondale Missouri, Osborn Missouri, Sibley Missouri, Oaks Missouri, Unity Village Missouri, Levasy Missouri, Randolf Missouri, River Bend Missouri, Jackson County Missouri, Johnson County Kansas, Clay County Missouri, Wyandotte County Kansas, Cass County Missouri, Platte County Missouri, Leavenworth County Kansas, Miami county Kansas, Lafayette County Missouri, Ray County Missouri, Clinton County Missouri, Bates County Missouri, Linn County Kansas, Caldwell County Missouri, Crossroads Real estate, 18th and vine Real estate, Hospital Hill real estate, library district real estate, longfellow real estate, dutch hill real estate, quality hill real estate, river market real estate union hill real estate, Greater downtown KCMO real estate, East Side KCMO real estate, Midtown KCMO real estate, Westport Real estate, Hyde Park real estate, Northeast KCMO real estate, Northland real estate, Plaza Real estate, South Kansas City Real estate, Fairway Kansas real estate, Kansas city Kansas real estate, lake quivira Kansas real estate, Lenexa Kansas real estate, Mission hills Kansas real estate, overland park Kansas real estate, prairie village Kansas real estate, Shawnee Kansas real estate, weatherby lake Missouri real estate, westwood Kansas real estate
Leave a Reply