I have a 2400 sf home on a 1.5 acre corner lot that has been a gut-renovation - from new insulation, electric, to all new sheetrock, paint, flooring, all new kitchen and new bathrooms.It is zoned commercially and residential, has an attached 800 sf garage. It is priced competitively, but I do not owe a mortgage on the house, so, can be somewhat flexible. I am asking $130,000 - $10,000 option and a monthly payment of $1033.00.

The area is somewhat rural, "ok" schools, and most homes are not extravagant in this part of the world. A home that costs $200,000 is a "rich person's house".

I have been advertising for several weeks now on a lease-option or land contract - but with no success. No calls, no responses to Craiglist ads. The one family that looked from Craigslist (it is on Zillow as well)really wanted the house had this profile:

Three adults, three children under six years old. Only one adult was working, making a decent salary, but supporting 6 people.
Three adults had credit scores in the 420-490 range, even the working adult.
Multiple items in collections and multiple credit inquiries.
No ability to put any money into an option (they offered to pay over a three year period out of their tax returns). And they asked for a $200 drop in monthly payment.
One adult fighting second DWI.

They really wanted this house - but I turned them down based on the above issues.

I think that finding decent tenants is going to be an issue. This is a poor part of the country (northern New York), and the local economy is prison-based. That said, how can I structure my requirements so that I have some basic protection. One thing I will ask is that they carry an insurance policy to cover damages to the house and make myself the beneficiary...in the event that they move out with the house trashed. There are no property management companies to turn to up here.

I have been told over and over not to rent my homes out up here...that the tenants are terrible. Typically, most landlords don't even both screening their tenants...they just accept their money, tenants move-in and then out again within six months.

So, not ideal - but that is the situation on the ground.

How do I protect my investment as best as I can, given the tenants I am likely to have to work with?

Thanks in advance..

@Chana O'Leary First, your population is larger than mine. Even if your town is heavily leaning towards criminals, there are prison guards, school teachers, attorneys, small business owners, city employees, and other professionals that need quality housing. 

Second, you should stop advertising as a lease-option. People that can't qualify through a bank are high risk, which is why the bank won't loan to them. You should never take this on unless you really know what you're doing. Asking for a $10,000 option on a $200,000 home tells me you don't know what you're doing (no offense).

Third, a quick search turned up Deragon's Property Management in Massena. You can also call the local real estate companies and ask if they know of anyone that manages rentals or any large real estate investors.

@Chana O'Leary Why are you playing games with rent to own lease option crap ? Find a realtor and put it on the mls . If it’s priced competitive as you say then it will sell .

@Nathan G. Yes - I've dealt with Deragon's Property Management - but they are in Massena. The house is about an hour away. Regardless, they do not keep appointments or show up when requested - so, I don't consider them too much of an option.

@Dennis M Great question. But, I know how realtors operate up here. They are not exactly "go-getters". Their idea of "marketing" is to put it on the MLS and wait for someone to call. If no one calls after six months or a year, they drop the price. Homes aren't staged, they don't want the "trouble of an open house" and they don't insist on pre-approvals or qualification. They don't even want to hire a photographer for professional photos and insist on taking pictures with their iPhones and posting them on the MLS. Forget getting them to show a home on the weekend - one realtor actually told me: "Real estate agents dare you to do business with them on weekends."

So - if I'm going to sell it - it won't be with a realtor up  here.

However, I appreciated your replies - and will definitely take your suggestions on-board.

Thanks so much,

Chana