Allow rent to own

[Jill McCann]

I’ve had long term tenants in a property that I own. They want to purchase it but can’t get a mortgage. However they can afford the rent payments and have approached me regarding a rent to own situation when their lease is up in March. I’m open to this situation as it’s the property I planned to sell in the spring. What considerations and terms make sense? How do we structure this? Would love any input and advice!

[Mitch Messer]

Hi @Jill McCann!

We've done these (lease/purchase) deals for two decades. My best advice is to FIRST run these folks by a mortgage broker of your choice to see if they are in fact serious candidates to purchase any time soon.

If they are NOT, you can stop right there.

If they ARE, have your loan officer draft up a specific plan of action for them to follow to get approved. For example, "no more 30-day lates and no new credit accounts."

Now you have a way to grade their progress toward purchasing your house.

When/if they become ready to qualify, remember to bring them back to the broker who helped you!