Rent to own

3 Replies

Im floating with the idea of rehabbing and holding as a rent to own property. does anyone have any experience in the this, would you do it again? are you still doing it? any tips? 

I'm looking to do this in an area the i would say is c class and has the opportunity of becoming a b- or b+ in a year or so, as gentrification is going on now in some of the parts. 

thanks in advance for your responses. 

I've found that rent to own is pretty much a marketing ploy.  Do you really believe the tenants will buy?

Just rent the home.

good point, however i do feel they are individuals that want to and don't have the means to yet. also it would be mainly rental but i would like to give an option to buy, if they were to choose that option it would be with a larger security deposit and portions of their rent to go towards the house sale price, with a 1 yr agreement. the intentions is and wishful thinking would be to acquire tenants who would care for the place as their own cause they intend to buy. once again wishful thinking. 

open to criticism. thanks  

2 years ago I had 2 properties I rehabbed and was planning on selling. The market changed here and I got stuck with them. Plan b! I don't want to be a landlord because I have to spend my time playing golf with my kids :) so I chose to rent to own . The trick here is to get decent down payment. On property #1, I got 10k down and they are paying about 1397 a month with $125 a month credited towards their remaining balance of 155,000. Long story short after 5 years I will make about 65k after they refinance ( better than the quick 20k i was trying to make on this low repair rehab. Property #2 i sold for 180,000 (top of the market) with 20k down and $1435 a month with $140 going towards their principal. After 5 years I will profit 100k on this deal Better than the 30k I was trying to make on the flip. I structure my notes at 10 years and my occupants at 30 years at 10% interest Since then I have no shortage of customers And can't buy houses fasten enough. I don't rehab anything anymore and I currently have 2 more under my belt at 40k profit and 70k profit over the next 5 years I don't need much cash flow ( although they have a few hundred dollars) so I look at these as seeds in the ground that will one day yield a big fruit harvest in 4 or 5 years. I have never rented nor do I ever see myself doing so. Not when rent to own relieves me of all maintenance, repairs and puts people in the house who have skin in the game and want to take care of the property. That's my experience so far ! It's been good :)

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