I would really appreciate some opinions on this. My husband and I purchased 2 properties at a steal 2 years back in a cash deal. We totally rehabbed the first property, and immediately did a rent to own with it. We figured the taxes were fairly low on them and the rental actually did cover the taxes on both properties, the taxes on our personal property, as well as a fairly decent profit margin. We did recoup all money we invested in the rehab and the cost of purchase for both properties. They were to get a mortgage by September and with that we were going to rehab the other property as a flip and from there look into multi units.
As we all know, things don't always work out like we plan. The couple decided they were were separating and it went back and forth with who was taking the property. When they decided neither were going to take it we were fair. They were already behind in rent and we agreed that if they moved out by the agreed upon date with the property cleaned we would not pursue legal action. They did move out but not before having to take it to court. We received possession of the property back and a $12,000 judgement (max the judge was allowed to grant). These tenants were spiteful; kicking holes and punching holes in walls and cabinets. Distroying everything possible and leaving a a couple rooms entirely filled with trash.
We totally rehabbed the property to bring it up to selling standards and surprisingly it was way more work than cost. The property took 3 months to rehab. My husband was totally disgusted at this point with renting and just wanted to sell it and be done with the whole mess. I have no objection to doing another rent to own even though it would put off the other property rehab. We listed the property through zillow and trulia almost 30 days ago. I did some decent Facebook promo stuff and we had a good feedback. I just listed with a flat MLS service to bring it online with the MLS and realtor.com. I did 2 open houses within the past 30 days and we had decent turnouts. There was nothing but positive feedback on the property. No offers yet though. I do need to add that the property is priced acurately for the area, but unfortunately, we are in a market where the housing market hasn't picked up yet. Average from the statistics I have read are between 60 & 90 days on market. I do not think they are accounting for how often houses are delisted with a new MLS by the realtors here.
My question is, in your opinion, how long should it be left for sale before pulling it and doing another rent to own? Figuring the house has not been generating income for about 6 months now. Thank you so much for your time and opinions.
I would do another rent to own. Make sure the NON Refundable deposit to purchase the property is a hefty one so that the ppl buying do not want to lose it in the end. With the monies made take your hubby on a mini vacay. ;)
thank you so much for your opinion. I greatly appreciate it.
My father-in-law has done a lot of lease option deals and it sounds to me like the experience you had is not the norm. If you've been holding the property for 6 months while it produces no income you have to decide how long can you afford to do that and compare the risk of holding longer against having to take a hit when you sell it. I agree with @Laurie Johnson that another lease option might not be a bad idea. Make the deposit a good size but not too much to turn people off. You want your tenants to have skin in the game.
Thank you Matt. I do totally agree. It put so much of a bad taste in my husbands mouth that he is really turned off by the idea of another tenant. I understand my husbands point entirely, but I am the more resilient of us. I am more than willing to take a chance again and postpone the other rehab. I do see the major advantages of the positive cash flow as well as the end purchase on our terms. How do I get him in the same mindset is the real question I guess. I was hoping with enough similar feedback from this post post he might get the big picture.
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