Submitted by: Dianne Maquilan

Investing a home could be beyond the reach for some tenants. On the other hand, there is an option that you could provide your occupants to make it easy for them to possess a property. If you are thinking about selling your stuff, you can sign a property owner-client lease option rental that is a contract with your tenants to have the option of purchasing the real estate after an adequate duration of time. When signing this agreement, make sure you seriously consider to valuable details.


1. A rent to own is a contract that defines that the occupants will buy the real estate over a specified period, typically one to 3 years. You will collect a greater non-refundable down payment, or option charges, from the tenant, typically one percent to five percent of the purchase amount, and credit it towards the deposit on obtain. In this period, the renter will be subject to a lease to rent the property for a particular monthly cost. The renting cost may be higher than market due to part of the rent, since accepted upon in the agreement, also would be included in the down-payment. The value of the real estate may be arranged at the time that the contract is drawn up or the provision may indicate that it will be available at appraised cost when the rent to own time frame has finished.



2. The lease should have all the conditions that your standard arrangement has in regards to amount of rent, duration, late payment fees and other pertinent provisions. NuWire Investor suggests that you keep two distinct agreements: 1 for renting then one for the rent to own to obtain. You must continue to pay for your house owner obligations, just like property taxes and insurance. Furthermore, indicate an amount for maintenance, in case any, in which the renter is going to be accountable. Your option agreement should be clear that, in case the tenant will not finish the investment, the owner could keep the option charge and premium rental payments.


3. Rent to own can be a win-win scenario for the property owner and renter. The owner keeps the guarantee that the home will be purchased over a specified duration, and, otherwise, the partial payment in addition to extra rent may be kept for compensation. Renters with a sense of property ownership will be occupying the real-estate for the period of the lease. Moreover, if the sale cost of the property is restricted in the deal and the market depreciates, the owner would not lose equity.

Rent to own gives the tenants to be able to enhance their credit scores and so establish an initial payment for the duration of the contract. Renters might be able to guarantee current market value and, if the term is long, the property may appreciate just before they acquire it. In addition to that they might be able to incorporate an “assignment” clause, allowing them to sell the agreement to the real-estate before they buy it and keep the distinction between the purchase and sales value.


4. The renter will not be contractually required to purchase the real estate at the end of the lease period or might wish to buy, however does not be eligible for a home mortgage. As well, the tenants may be evicted for not making his payments rent or for otherwise breaking the lease. If the transaction does not move forward for any purpose, the renter will lose the option cost and rent premium, and the property owner now must look for a new client right after making desired fixing. Furthermore, if the property is available for more or less than market value, the house owner or the renter will lose money in the transaction.

About the Author:

Lease Option Homes

is a marketing channel of Expert Realty Advisors, a company based in Phoenix, Arizona, with lease option sales as the main line of business. The company offers a

rent to own

program for newly-remodeled homes that are ready


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