If you play your cards right, I may just sell you the place.
Analyzing the benefits and setbacks of a rent-to-own option with investment properties
A rent-to-own agreement is essentially a 2-in-1 agreement which includes a standard residential tenancy agreement with a purchase option addendum. Typically the agreement includes a clause wherein the landlord/investor saves a portion of each monthly rent payment to be used by the tenant if and when they purchase the property.
Rent-to-owns can provide major benefits to both landlords/investors and tenants/buyers. A few examples of investor benefits are:
- Above market-rent can normally be charged
- Attracts good quality tenants who have a sense of ownership in the property.
- Future purchase price predetermined – allows for easy return on investment calculations
If you ever have any questions about rent-to-own agreements, any at all, please don’t be shy. Give me a call or send me a text email. I am always willing to chat real estate over a cold beer or strong coffee.