Tenant wants to buy, I don't want to finance

[M Marie M.]

From day 1 the tenant has expressed an interest in buying my one and only rental.

I'd like to sell said rental to tenant, eventually.

However:

•  House isn't worth more than 40K in it's current state, so renter couldn't get a regular mortgage (unless there is a bank out there that goes that low). I bought it with cash for 34K after the housing bubble burst.
• Tenant has crappy to so-so credit.
• Tenant is semi-self employed, with temp jobs in off season
• Tenant most likely has no savings
• I don't want to finance
• I don't want to do rent to own

Also I'm debating about doing some improvements to the property (new roof, maybe add A/C), since the value of the house, after years of declining, is now going up, because two vacant houses on both side of my house are finally repaired and occupied. This would increase the value possibly beyond the tenant's ability to buy, maybe.

Neither of us are in any rush, so I'm see what options there might be out there for my tenant. If and when I do make improvements to the house I would like to sell it and trade up for another property elsewhere. That is why I have no interest what so ever in getting stuck in a rent to own or financing it. I want to take the money and put it in another rental, now that I have a better idea of what works better for me.

So any ideas?

[Jeff Rabinowitz]

@M Marie M., Dodd-Frank makes financing an owner-occupant very risky for an individual investor. That includes many rent to own scenarios. The penalties are onerous. Please read through the numerous threads on BP regarding this and consult a local, knowledgeable, attorney before structuring such a deal.

@Adrian Smude, any notes that an individual created for an owner-occupant would be extremely difficult to impossible to sell. Anyone who bought the note would inherit the risks. If you could find a buyer it would only be at a large discount.