Investor / Rehabber · Fort smith, AR · Member since 2014 · 178 posts · 30 votes
With renting I know that I have to fix stuff when it breaks and right now I don't want to do rentals
With lease with option to purchase when something breaks who pays for it even if I put it in the contract that the tennant is responsible if somthing breaks i.e. an HVAC unit etc.
I know that with a owner finance deal that the owner is resposible for all repairs and up keep
So what is the real difference from these 3.
What I am tring to figure out is somethings with the new dodd frank laws. I am wanting to lease w/option my SFH out for a year and then put them on a contract for deed.
A lease is a rental contract with a certain duration. Whether there is an option to buy or not the lease is still a rental. Technically, to not make it fuzzy the owner is responsible for repairs.
I usually charged for the option but it reduces the purchase price or acts as a down payment. Since the change in the law I charge a price for the option but it is never applied to the purchase price. I use to have the tenant buyer pay for repairs. I no longer do that. I also let some of the rent payment apply against the price of the house. I no longer do that. I want it to be crystal clear that this is a lease/option and not a seller financed deal.
I don't know if I am being to strict or not but it is how I am doing it.