Owner Buyer Rental Lease Options

Submitted by: Dianne Maquilan

Acquiring a piece of property could be beyond the reach for some tenants. On the contrary, there is an option that you could give your occupants to make it easy for them to possess a property. If you are thinking about selling your stuff, you can sign a owner-buyer rental lease options that is a contract with your tenants to have the option of purchasing the real estate after a specific length of time. When signing this agreement, make sure you look closely at valuable details.

Description

1. A rent to own or lease options is a contract that defines that the renters will acquire the real estate over a specified period, typically one to three years. You will collect a greater non-refundable advance payment, or option payment, from the tenant, basically one percent to five percent of the purchase cost, and credit it towards the up-front payment on acquire. In this particular period, the renter will be subject to a lease to rent the property for a particular monthly value. The renting value 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 cost of the real-estate may be managed at the time that the contract is drawn up or the provision may indicate that it will be available at appraised rate when the rent to own duration has ended.

Terms

2. The lease should include all the details that your standard arrangement has regarding amount of rent, duration, late payment fees and other pertinent provisions. NuWire Investor has recommended that you keep two individual agreements: 1 for renting then one for the rent to own to purchase. You must continue to pay for your house owner obligations, like property taxes and insurance. Moreover, indicate an amount for maintenance, in case any, wherefore the renter would be accountable. Your option agreement should be clear that, when the tenant did not finish the investment, the owner could keep the option charge and premium rental payments.

Advantages

3. Rent to own or lease options can be a win-win scenario for the property owner and renter. The owner maintains the guarantee that the home will be on sale over a particular period, and, otherwise, the down payment in addition to extra rent may be kept for compensation. Occupants with a sense of property ownership will be occupying the real-estate throughout the lease. Furthermore, if the sale worth of the property is restricted in the deal and the market depreciates, the owner would not lose equity.

Rent to own permit the tenants in order to enhance their credit scores and so establish a deposit 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 purchase it. In addition to that they might be able to incorporate an “assignment” clause, that allows them to sell the agreement to the real estate before they buy it and keep the variance between the purchase and sales value.

Disadvantages

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 mortgage loans. As well, the tenants may be evicted for not responsibly paying 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 owner now must look for a new customer 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

Source:

isnare.com

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