General Question

ItalianPrincess1217's avatar

How do rent to own properties work?

Asked by ItalianPrincess1217 (11657points) August 29th, 2018

My house is listed for sale and hasn’t had any offers. It’s been listed almost 60 days and we’ve dropped the price a few times as we think it was listed too high. The one thing people keep asking is whether we’d do rent to own. Initially I was against this idea (and I’m still pretty turned off by it) but at this point winter is coming and it’s down to the wire. If it ends up being our last resort, how does it all work?

My questions:

Do we get a deposit upfront?
How much of a deposit?
How much of the monthly rent actually goes towards the balance of house?
Why is this a good or bad option?

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9 Answers

elbanditoroso's avatar

Poorly. Way too easy to be ripped off. Both for you as the seller and also the renter.

You need an excellent real estate lawyer. Not just a decent one.

chyna's avatar

Once they get in, if they aren’t paying, it’s very hard to get them out. They have all the rights and you have none. If they trash your house, you can take them to court but good luck recovering your loss. It’s best to make a sale and a clean break from it.

ItalianPrincess1217's avatar

@elbanditoroso I figured. That explains the bad taste in my mouth about the whole thing.

ItalianPrincess1217's avatar

@chyna Sounds like a nightmare of stress that I don’t need.

Dutchess_III's avatar

It’s pretty dangerous, IMO. There has been only one time that I was willing to owner carry. It was when we sold our 5 acres…at a profit. However, she put almost half the asking amount down in cash, which let me pay off the loan, and now I get $100 a month direct deposited.

ItalianPrincess1217's avatar

@Dutchess_III I would have to get a large deposit and I’m not sure anyone who needed a rent to own would have that much money anyway. I’m talking around $20,000.

chyna's avatar

Since you mentioned it, have you had a professional appraisal done on your house? Not just a realtor saying what they think your house is worth? You said you’ve brought the price down several times, so it sounds like the price could be way off.

ItalianPrincess1217's avatar

@chyna Not since the renovations were completed, no. I think we were overpriced by $20–25k initially! Now that we’ve come down so much I’m concerned it seems that we’re either desperate or that something is wrong with the property. I wish we had priced properly from the jump.

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