Rent to own option for Cash Flow

6 Replies

What's your opinion of rent to own options for cash flow investing?

I'm looking at SFH rentals and thinking about using the rent to own option to reduce the property management issue of rentals.

  

Great question - we have one under contract that we would like to rent to own! Really interested to hear pros/cons, process/procedures! Thanks for starting the conversation!

Definitely a good option to add to an investors tool belt.

Here's some benefits

•Less property management head aches.

•It turns the renter style mind into an ownership mind.

•Allow families with past credit issues (can't currently bank qualify) to get into home ownership.

Were you thinking of lease options (short term 2-3yrs) or acting as the bank and adding cash flow in the monthly payment for full loan term (15-30yrs)

@Debra N. most of my rentals are rent to own. I use a 35 year lease option contract. $5,000-$9,000 down non-refundable option payment. Tenant pays all utilities, repairs, and maintenance.

@Robert Herrera  Any chance you are willing to share numbers?  Or what market and what price of homes?  I just don't see that as plausible in my market, but was curious if it is just my market and this is very doable elsewhere?

@Rich S. Sure. I purchase in southern Colorado.

I purchased a 3br 1ba for $90k.

Terms: Owner Financed 30year 8%. $5,000 down. $700 month PITI. Would be cheaper with a conventional.

Rent to own $7,000 down $1,050/month
35 year contract. $350 Cashflow. $120,000 purchase price.

$11,200 in the first year

Read: Straight Path to Real Estate by Kris Krohn! This book is the best on Lease Options

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