Answer by Feeling Mutual
Answer by hunter2
The basic rent to own is some money down. As much as you can get. Then an agreed upon monthly rent. Usually higher than the market rent by $ 150-200 per mo. The extra per mo. is credited toward the purchase price along with any up front monies (option money)
The sales price is agreed upon now. It is writen in the contract.
You agree that at the end of 1 or 2 years they are to finance the home and pay you off.
Best of luck,
You treat the lease as a standard tenant lease, except that the tenant is responsible for ALL repairs, since they intend to own the home in the future. DO NOT put anything about the option to purchase in the lease, it will make it harder to evict them if you must.
In the Option to Purchase agreement, you say at what price they are going to pay, when they can excersise the option (any time, in a year, in 5 years, ect), when/if it expires, how much they paid as a deposit, and how much of their monthly rent is paid towards the purchase. Be sure to word it as a “Deposit” and not a “downpayment.” If they don’t purchase, a downpayment would have to be refunded, a deposit wouldn’t be if they broke the terms of the lease.
Be sure to include that the option is cancelled if the lease is broken. If they stop paying rent, then you can evict them based on the lease, which says nothing of the option to purchase, and the option to purchase is voided by the lease and you keep the deposit. Then you work on finding somebody who will actually make payments.
I don’t mean to sound pessemistic, but most homeowners looking to rent-to-own are used to renting, have bad credit, and poor incomes. Expect the house not to sell, and if it does then wonderful, you made a profit!
Answer by outwest
I cannot stress this enough, GET A LAWYER to draw up contract! Ask me how I know this. It should only cost 100-300 to do. Make sure the lawyer is a real estate lawyer and ask how many lease option contracts he/she has done.
In my opinion, rent to own is not a thing to do, so I think the best way to do it is this.
1 – Find a place to rent. During the rental period, get your credit up and save some money.
2 – When the time comes, get pre-qualified for a loan.
3 – Go find whichever house you’d like to buy that falls within your budget.
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