Residential real estate is bought, sold and rented. Combining the three, the “lease purchase” or “rent to own” transaction becomes a winning triple play. Buyers, sellers and professionals all win.
Though old and worn, a cliché or two is appropriate for the rent to own transaction:
· “The best negotiation is a Win-Win negotiation.”
· “What’s in it for me? ”
Simply, all principals win in a lease purchase transaction. There is something in it for every participant.
The Renter/Buyer in Rent to Own – With tighter mortgage requirements brought on by the mortgage crisis of 2007-2008, a great many would-be homeowners find themselves unable to qualify for a home mortgage. Lease purchase presents an opportunity for these people to rent while working toward a mortgage. Other positives for the rent to own buyer include:
· Time and ability to build advance equity and down payment.
· Major maintenance still handled by the seller/owner while renting.
· Taxes and structure insurance not paid by the renter/buyer.
· Time to repair any credit issues for a better mortgage rate.
The home buyer in this situation can realize great benefit from a lease purchase or rent to own transaction. These are the highlights, get the rent to own advantage details.
The Seller/Landlord in a Lease Purchase – The seller/landlord in a lease purchase or rent to own deal is enjoying a number of advantages. First, it’s usually easy to locate buyer/renters who will gladly enter into this type of purchase agreement. A great many people out there want to own a home, but do not currently have the ability to get a mortgage or make the down payment. Offering them an alternative will bring buyers to your door.
Most sellers will get a better price for their property, as the buyer/renter in a rent to own is appreciative of the opportunity to own and bargains less. Other advantages include:
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· Financial advantages can include higher rents, and non-refundable option payments.
· Many buyer/renters never exercise their purchase option, leaving sellers open to doing a new one and keeping the option payment.
Do you have a home that isn’t selling, just expired on a listing, or one that you’d like to hold for future income? Talk to the professionals in the lease purchase and rent to own markets.
Investors as Buyer or Seller in Rent to Own – Real estate investors can structure purchases and rent the home to others to grow their portfolios with much less cash.
Investors that use lease purchase or rent to own to place renters in their owned properties realize all the benefits of the seller we’ve already outlined. The non-refundable option payments alone can increase return on investment nicely. The investor can tap equity for other investments or to increase their property portfolio.
Real estate investors, on either side of the lease purchase or rent to own transaction, realize all of the benefits of the buyers and sellers we’ve discussed. Work with the lease purchase and rent to own professionals to realize your greatest investment returns.
Real Estate Professionals and Lease Purchase – In slow markets or those racing ahead in price appreciation, there are distinct benefits for buyers and sellers in lease purchase or rent to own. The smart real estate agent or broker will develop marketing and services around this market niche. Most coaches and consultants will tell you that a well-developed niche market is a sure-fire pathway to success.
Serve your seller clients who want to hold on to a property for future appreciation, while keeping great tenants who pay top dollar rents and take care of the property. Perhaps the seller just can’t move it right now at their price. The real estate professional who gives them options will reap rewards in future business and current income.
How many buyer prospects do you have that are experiencing problems in mortgage qualification? Or, how about the group who needs to gather more for their down payment? Be the valued professional who presents them with a solution that gets them into their future home with a low cash requirement and no mortgage.
It’s a simple matter of getting the details from our lease purchase and rent to own specialists.
