Investors looking to make a killing in our current real estate
condition (huge recession), should consider the term, �rent to own.�
Renting to own gives people the opportunity to rent a home with the
intention of buying it without having to make a large down payment. This
way, investors can buy foreclosed homes and offer the �rent to own�
feature.
There are more foreclosures on the market today than ever before. You
used to only see foreclosures in blighted areas but now they are
everywhere. Even in upscale residential neighborhoods, you can see
foreclosures. The foreclosure is usually vacant and has been for some
time. The bank took over the property when the owners were unable to pay
the mortgage and is now in the process of selling the property.
There truly has never been a better time to purchase foreclosures than
right now. Because the interest rates are so low and there are so many
homes on the market, you can get some real bargains. Before you buy a
piece of property, however, you should be sure that you know your
market. You should make sure that the area in which your property is
located is an up and coming area and not blighted. It may be tempting to
purchase a home for a few thousand dollars in a blighted area, but it is
a poor investment. Not only will you have a hard time selling the home,
but you will also have a tough time getting renters who will pay you on
time.
If you purchase a foreclosure in a solid area, you can give people who
are interested in owning the home but do not have money for a down
payment, an opportunity to rent to own. They will pay you rent each
month and a part of this money can go towards the down payment. You
offer them a certain amount of time to come up with the amount of money
that they need for the down payment as well as the mortgage. This is
usually a year or two. If they comply with the terms of the rent to own
agreement, they get the house sold to them for the agreed amount. You
have made a few dollars in the investment and the renter is now a
homeowner.
If the renter does not follow through with the agreement, then you have
a choice to extend the rent to own agreement or sell the home to someone
else. The good thing about the rent to own program for landlords is that
if a renter is potentially thinking of buying a home, they are more
likely to take good care of the home. One thing about renting property
to tenants that landlords do not like is the fact that many of them do
not take care of the property. If you use the rent to own strategy in
this down real estate market, you can get tenants who truly want to own
the property and who have more of a motivation to make their payments on
time. The most important aspect for this plan to work correctly is to
have a local real estate attorney draft your rent to own agreement! This
is NOT an choice, but, a necessity in this kind of agreement! If done
correctly, whether you sell the home or not, you still make money with
your investment.
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