When to Rent vs. Rent-To-Own
Hey BP, I've got a 2 bed, 2 bath SFH that I am nearly finished fully renovating (new foundation, hvac, plumbing, electric, finishes, etc.). I'm planning to BRRR once complete and take out a large chunk of equity to allow me to find another one. By my research I think it will rent for $1500/mo as a typical rental. I've had a few investors tell me to consider putting the home up as a rent-to-own, or lease-to-own. Let's say today's retail value of this rehabbed house is $215,000. If I were to offer a lease-to-own option, what would you ask for down payment and monthly to make it more competitive than a normal rental? I am intrigued about the tenants having ownership so that the property is better maintained and I am less involved as a manager (hopefully). I ran a quick mortgage calc on that value house @ 215k, and came up with appx. a $1000/mo payment for 10% down and 4.75% 30-yr note, which makes me think keeping it as a $1500/mo rental is the better choice. What would you do?