Lease expiring - prospective tenant inquiring about rent-to-own

1 Reply

Hey all,

I would classify myself as a buy and hold investor, of Single Family Homes. The lease is expiring soon on one of my properties. FMV for it is about $120k. I owe about $45k on it. Rent is $1550/month. It cash flows at about $200 a month. When I Brrrr'd it (about 6 years ago), I left about $20k invested, so cash-on-cash return is about 12%.

It's a decent property. I've never had any trouble finding tenants. However, it's not in a great neighborhood, and the HOA it's in is very poorly run, and a disaster waiting to happen. So with the market high now, I've idly considered selling it.

I started advertising for a new tenant today (just on facebook) and within 30 minutes I had 15 inquiries. One of the inquiries asked if we would consider rent to own. This piqued by interest. However, I'm not familiar with any of the strategies for this (LO, Seller Financing, Land Contracts, etc). I've done some reading through this forum and gained a basic understanding of these, but I'm plagued with uncertainty. 

I was hoping somebody with some experience in rent-to-own type transactions could consider this particular situation and share their thoughts on what they would do if they were in my shoes.

@Matt Herbert  I've started in real estate 25 years ago when I was introduced to lease options.  Done correctly they are safe and smart and will likely net you more at the closing table than a traditional sale.
As a landlord, dealing with tenant/buyers usually means less tenants and toilets to deal with.  So unless you're in love with the property, if you have a qualified t/b, set up a Rent-To-Own, live long, and prosper.