Advice on selling property rent to own
Hello, beginner here, seeking advice on selling a house rent to own. I write the figures out and the numbers make sense to either make a nice lump sum at the end of the term or they back out and you've made money on the rental income. Here is what I figure and the numbers are just rounded off.
Obtain a home for 75k with no closing costs that needs no or only cosmetic work. True value would be apo. 100k.
Sell rent to own for a 100k and ask for a non-refundable lump sum up front like 10%.
If home would normally rent for $900 a month then ask for $1100 and the additional $200 can go towards the cost of the homes purchase to make deal more appealing to potential buyer.
So at the end of a year term the buyer would purchase the home for $87,600. That's 10k off 100k plus $2400 from the $200 a month.
In the option to buy agreement I would also state that the buyer is to pay closing costs.
So at the end of the lease agreement you sell the home to the buyer, at the agreed price, or you pocket the non-refundable 10k and the rental income that was earned. You can either negotiate a new contract or move on to something else.
This is a short summary of what I have written out put would appreciate some expert advice/ideas on this concept. Any and all advice is welcome but would prefer to hear from someone who currently does this or has before. A nice 3 bed 2 bath in my area is easily obtainable for 75k as well. As a new investor this is something that interests me but am just not entirely sure of the whole process.