Doing A Rent To Own Vs Just Renting The Property
A rent to own contract is an interesting way of renting out a house and it does have some pretty big advantages over the more traditional approach of just renting a property.
First for everyone that doesn't know what a rent to own contract is or how it works let's go over some of the basics. It is basically an agreement between a tenet and landlord which allows the renter to eventually buy the house at a given price at some point in the future.
For example if the house is worth $100,000 now you might agree to sell it to the renter for $120,000 in 5 years. For this privilege you make some money up front and the renter pays you rent each month. When the 5 years comes up they can decide whether they would like to buy it from you or not. If they chose to buy it from you they will have to pay you $120,000 and you will have to give up the deed to the house.
There are some nice benefits of doing this.
1. The Rent Money is More Secure
If you get a dead beat renter you will have to go through the process of kicking them out and finding a new renter. All the renter loses is a roof over his head for 1 night; they will just go somewhere else and become a dead beat over there. However with a rent to owner in the property you can write it into the agreement that if they stop paying they lose the property and because they are actually working to own the property it will affect them more if they get kicked out of it.
3. Take Good Care Of It
One other advantage is that a rent to owner will actually keep the house in good condition. Someone who rents a property will not care about a property as someone who sees it as their house and is working to pay it down.
3. Tons of Demand
There is also a lot of demand when it comes to rent to own contracts. More demand means you will be able to fill it faster and it also means that you will be able to charge more money each month, which is also a bonus.
A rent to own contract simply works over the long term.
Article Source: FxTradingStock.com
About the Author
For more on the lease to own agreement or for more on real estate visit Shaun's buying rental properties page.
by: Shaun Rosenberg
Total views: 43
Word Count: 405
Date: Tue, 15 Jun 2010
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