everyone wants a resilient home, so why not two?

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  • Tue, Feb 05, 2019 - 08:00am   (Reply to #30)

    #31
    Yoxa

    Yoxa

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    Quote:  Ive already informed

Quote:

 Ive already informed my tenant that he’s got to go

I hope you offered your tenant the first chance to purchase the place, first right of refusal. Is there any scope here for a rent-to-purchase deal?

  • Tue, Feb 05, 2019 - 08:02am   (Reply to #30)

    #32
    Yoxa

    Yoxa

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    Rent to purchase

duplicate – please delete

  • Wed, Feb 06, 2019 - 12:15pm   (Reply to #30)

    #33
    brushhog

    brushhog

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    Yoxa wrote: Quote:  Ive

Yoxa wrote:
Quote:

 Ive already informed my tenant that he’s got to go

I hope you offered your tenant the first chance to purchase the place, first right of refusal. Is there any scope here for a rent-to-purchase deal?

Yes I offered him the chance to buy it. He’s just not in the financial position to do it. No rent to purchase I just cant afford to offer that to him.

  • Wed, Feb 06, 2019 - 04:35pm

    #34

    jeantheau

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    sell house outright vs. 'rent to own' vs. hold mortgage

As someone who is thinking about selling a house, I am pondering the pros and cons of various strategies:
1. offer a “rent to own” arrangement;
2. just sell outright;
3. hold the mortgage myself.

If I’m trying to generate cash, which I am, option 1 is a non-starter. Plus, they’d have no skin in the game and could walk away anytime their goals change. Maybe I don’t understand how rent-to-own arrangements benefit the seller. Even if the arrangement does eventally complete, it seems like I would be giving away the “present value of money,” with no value added above and beyond the rental income.

Holding the mortgage myself is a little more appealing IF the buyer can do a substantial downpayment. That generates some cash up front, and provides a steady income (principal+interest) in the future. That income, of course, will be subject to the effects of inflation — and possibly hyperinflation. Like option 1, the ace in the hole is that the property reverts back to me if there is a default. But in my case, this will be my next-door neighbor, who I will probably end up liking and caring about, and I can already see my good-guy hat making the “hammer” phase of a kick-out scenario difficult.

Option 2 (sell outright) seems the cleanest, and it allows me total control and flexibility over what is done with the funds associated with the sale. I do miss out on the value of the interest in option 3 (hold the mortgage). In option 2, I suppose a worst case would be that the new owner eventually defaults and the bank now owns the house, and who knows what happens next.

Anyone out there have experience with rent to own or holding the mortgage?

 

 

 

  • Fri, Feb 08, 2019 - 12:36pm   (Reply to #34)

    #35
    TechGuy

    TechGuy

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    Rent To Own

jeantheau:

“Anyone out there have experience with rent to own or holding the mortgage?”

I believe that only makes sense if you don’t have a mortgage on the property. Also check with your Mortgage lender, as they might forbid you from a reat to own.

Issue I see is liability, Is your Rent-to-Owner going to handle the property insurance, Taxes, and other liabilities? Can they take the property away from you if they declare bankruptcy? (ie Primary Residence protected from Bankruptcy)  I would recommend discussing with a Real Estate Attorney before considering this.

Ask Chris Martenson to set up a Real estate classified section here at PeakProsperty. Perhaps you might find someone here looking to move. Your target buyer is either someone close to retirementin retirement & looking to downsize & escape high tax areas, or those that can work remotely (presumly you have decent internet access from the property).

 

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