How Can You Benefit from Rent-to-Own as a Seller?

The real estate market seems somewhat unpredictable with its ups and downs. Sellers are often lured into listing their property in a seller’s market, but a little tardiness in the selling process and the market may turn buyer-friendly. Likewise, buying a property is an equally daunting process given the hassles of down payment, mortgage plan, and other moving expenses.

There’s a worthy alternative to traditional buying and selling, known as the rent-to-own concept. It addresses both concerns; the delay in selling for a seller and the expenses of purchasing for a We buy houses tulsa buyer. Inrent-to-own, you as an owner will sign a typical lease agreement with the renter alongside an option to purchase the property upon lease expiry. Hold on to the article as we further explain the process below:

Rent-to-Own – Types of Agreements

The rent-to-own concept has two types of agreements, given by:

• Lease-Option

In a lease-option agreement, the buyer has an option to purchase the house once the agreed term of the lease expires. Else, he or she can opt not to buy the property and move on to rent another one like a typical tenant. For buyers, it provides assurance not to be legally compelled to make a purchase. Thus, they find it an ideal option.

• Lease-Purchase

Unlike lease-option, the lease-purchase agreement obligates the tenant to purchase the property once the term runs out. The buyer can’t just walk out of the agreement with an excuse for his or her lagging financials. This is more suited for you as a seller if you aim to sell your house within months or a year.

Rent-to-Own – How to Make It Work?

The idea primarily is to sign a rental or lease agreement with the tenant giving them an option (or obliging them) to buy the property once the lease concludes. Below, we’ve elaborated how exactly will rent-to-own benefit you:

Step 1:Securing the Deal

• Increase the Rental Payment

The tenants (or buyers to-be) make monthly rental payments just as the typical rental agreement requires them to. According to a rent-to-own-based lease agreement, the tenant is ought to pay somewhat higher rent, which is usually a percentage of the actual rent. The additional amount is later credited to the client once he or she purchases the property. This is an ideal way to secure the deal since the payment is non-refundable in case the tenant opts out of buying.

• Charge the Upfront Fees

Paying the upfront fee allows a tenant to purchase the house once the agreement expires. If the renter walks out of the deal, the payment is rightfully confiscated. Conversely, if he or she opts for buying, the amount is credited as the down payment. Upfront payment is yet another way to guarantee the purchase in the case of a lease-option agreement.

Step 2:Settling the Purchase Price

In a rent-to-own agreement, you have an option to either pre-determine the purchase price when striking the agreement or leave it to be settled later. Either way, you need to remain cautious when finalizing the purchase price.

• Price Settlement Beforehand

If you agree to set the price beforehand, be sure to keep it slightly above the actual estimated price as the property’s worth increases over time owing to inflation.

• Price Settlement After Lease Expiry

Correspondingly, if you determine the price at the time of selling, hire a professional to inspect and appraise the property first.

Step 3: Sorting out the Maintenance Expenses

In a traditional lease agreement, the maintenance and repairs are at the owner’s expense. A rent-to-own agreement, in most cases, requires the tenant to pay for the property’s maintenance, tax, and insurance. But the tenant would likely raise objections over it. Therefore, it is prudent to contact an attorney and settle the expenses early on.

Conclusion

Selling your sell my house fast Tulsa via rent-to-own can turn highly beneficial if implemented correctly. It favours you the most if you do not aim to sell your house fast and want to build equity over time. Similarly, the additional percentage on the rental payment combined with the upfront fees keeps you on the safe side as well. Yet, it is essential to sort out the crucial points with the tenant early on; particularly the maintenance expenses and time span of the agreement.