Those who want to join the ranks of the 65.5% of Americans who own homes often find a challenging path before them. Navigating mortgages and monthly payments can be a challenge, and finding affordable homes is also a hurdle.
Rent-to-own homes are a top solution for many families. As a landlord, you can make this path to homeownership possible.
Read on to learn:
- The basics of rent-to-own agreements
- Why they're beneficial for landlords
- The ins and outs of the rent-to-buy process
- How to navigate leasing for these properties
What Are Rent-to-Own Agreements?
Tenants in rent-to-own homes sign a rental lease for a locked-in period of time. In this way, these leases are similar to other rental units.
However, unlike other rental properties, the rent-to-own agreement lets the tenant buy it when the leasing period runs out.
There are two types of rent-to-own agreements.
The first is a lease-option contract that:
- Offers the option for a tenant to purchase after renting
- Does not force the tenant to make the purchase
- Helps tenants get more time to save up before making a decision
The second is a lease-purchase contract that:
- Obligates the tenant to purchase the property after the lease expires
- Offers more rigid terms than lease-option alternatives
- Remains in place unless there is a breach of contract
The Benefits for Schaumburg Tenants and Landlords
There are many benefits for potential buyers when they look into these home-buying options. Some include:
- Living in the property before making a purchase
- Time to save up before buying the home
- More time to find a mortgage
- Potential to lock in a purchase price within a growing market
Landlords looking to sell can also reap many benefits, including:
- Steady passive income from rent
- The ability to sell properties for the highest possible price
- Potential to lock in a purchase price within a depreciating market
- Easy navigation in challenging markets
- Highly coveted leases that make it easy to find tenants
Navigating Alternative Home Financing
Working with Schaumburg, Illinois property managers can help you navigate rent-to-own leases. They have extensive experience in:
- Drafting legally-binding lease documents
- Negotiating terms with potential buyers
- Understanding the ins and outs of rent-to-own agreements
- Setting reasonable rent
- Marketing home buying options well
- Communicating with landlords and potential buyers
They also help with tasks like:
- Tenant/buyer screening
- Rent collection
- Collecting additional payments for rent-to-own homes
- Maintenance and cleaning
- Sending out reminders to tenants
- Conducting tenant surveys to ensure satisfaction
This ensures that you won't breach the contract and can collect the income from your property for sale. It makes it much easier to thrive in a competitive market!
Manage Rent-to-Own Homes With Expert Help
Rent-to-own homes are great investments for landlords and are highly coveted by tenants. Now that you know their basics and benefits, it's time to learn more about making the most of your Schaumburg, Illinois property.
PMI Chi-Town is excited to help you generate the highest possible income on your rental. Request a free property analysis to learn how much your investment is worth!
