Do you own a property that you want to sell in the San Antonio area? For many homeowners, using a rent to own agreement will be the most profitable way to sell their house. Learn more about how it works and everything you have to do to sell your house by means of a rent to own agreement!
Most sellers don’t think about the benefits of a rent to own agreement for their San Antonio house. While the conditions of each contract are different, there are some great perks you’ll see across the board. If you don’t have to have the money from the sale immediately and are comfortable renting out the home for an above average amount every month, selling your home by means of a rent to own agreement may be the ideal method to sell your San Antonio house!
#1 – Cash Upfront
With the majority of rent to own agreements, the tenant must make a down payment to the seller. Even though this might be much less than with a traditional loan, it should be sufficient enough to ensure the tenant won’t back out of their debt. You can even utilize an option fee, that is non-refundable and provides the tenant with the option to buy. This is usually from about 3.5 to 5 percent of the sale price. Typically, this option fee and some of the monthly rent will go toward the tenants down payment once the official sale happens.
#2 – Generate Passive Income
So long as you’ve got a tenant in the house, you will be generating income on the property. Most times, a tenant will pay above average rent, with a portion of the funds going toward the eventual down payment to the lender. Your tenant isn’t likely to risk default, losing their deposit and option to purchase. Knowing this you can pretty much rely on a continued tenancy from your tenant for as long as you own the property.
#3 – Get The Price You Want
Tenants using a rent to own agreement generally aren’t able to qualify for a traditional loan. Whether they don’t have the down payment, the earnings to qualify, or the credit score required, buying by means of a rent to own agreement will allow individuals to purchase who might not have been able to in the past. As such, by having the chance to purchase, these people will likely be willing to pay your asking price for the property, as long as it is fair.
Keep in mind that the value of the property can go up or down while the agreement is in place. The negotiated purchase price will remain the same.
#4 – No Risk If The Tenant Defaults
In most agreements, if the tenant defaults, the seller is able to keep all monies paid. It’s true that you’ll be back at square one, however, you’ll likely be ahead financially and have the choice to sell outright or locate a new rent to own tenant. The amount you’ll be able to profit here may be from the thousands when you include the raised rent and down payment.
#5 – Increase The Number of Potential Buyers
There are all types of wonderful people out there who are able to purchase your house, people who would never default on their loan. However, they may have a blemish on their credit report or insufficient down payment, which makes them unable to purchase a house at the moment. They want to purchase but are being held back due to something on paper. With a rent to own agreement, you will be able to open the door for lots of individuals who may not have been in a position to buy otherwise.