There are numerous compelling reasons to consider using a rent to own contract when selling your house in San Antonio. Discover the advantages of this selling method for your San Antonio property!
Unfortunately, many homeowners often overlook the option of a rent to own contract when they decide to sell their house in San Antonio. The prospect of becoming a landlord often deters them. However, the benefits of a rent to own arrangement can outweigh those of a conventional rental property. With a rent to own contract, the tenant is more likely to treat the property with respect, pay rent promptly, and agree to your asking price for the house in San Antonio. Before dismissing the idea of a rent to own contract, it’s important to assess the financial implications and understand how it can work in your favor.
A Fast Sale
By opting for a rent to own contract to sell your San Antonio house, you open up your property to a wider pool of potential buyers. Numerous individuals are eager to purchase a home but face obstacles when it comes to obtaining a traditional mortgage. While some lack sufficient funds for a down payment or have credit issues that disqualify them from a loan, there are various other circumstances that affect a person’s ability to buy a house conventionally. For instance:
- Recently self-employed individuals may be unable to qualify for a mortgage.
- Those who had to allocate their down payment to other expenses but still want to buy immediately.
- People with an existing mortgage, making it harder to secure a second one.
- Individuals burdened with other debts, which negatively impacts their credit profile.
- Those haunted by past bankruptcies or evictions.
Everyone experiences difficult situations at some point. By selling your house through a rent to own contract, not only do you enjoy numerous benefits, but you also help someone fulfill their dream of homeownership.
Home sellers often require a down payment or option fee. The amount varies depending on the contract but typically ranges between 2% and 7% of the purchase price. It’s important to keep in mind that if your buyer struggles to come up with a down payment for a traditional mortgage, they might face similar difficulties with a substantial down payment for your property. Setting a reasonable fee will attract more potential buyers. However, it is advisable to include an option fee as a form of security deposit to ensure that buyers remain committed to the property.
Get Your Asking Price
While the sale price of a home is often negotiable in traditional transactions, sellers have the upper hand when working with buyers under a rent to own contract. Most buyers are willing to pay the asking price to secure the opportunity to buy a home. In contrast, properties sold conventionally often go for much less than their original listing price. After factoring in repairs and negotiations, homeowners often find themselves with significantly less profit than anticipated.
Consistent Income Each Month
Selling your house through a rent to own contract guarantees you a consistent, predictable income each month. The lease agreement specifies the terms, providing you with a reliable rental income for the next few years. Tenants under a rent to own agreement are more likely to pay rent on time due to their genuine interest in the property. Additionally, the monthly rent charged is often higher than that of standard rental properties in the same area. While a portion of the rent is typically allocated towards the buyer’s future down payment in many contracts, if the tenant/buyer defaults on the agreement, you keep the option fee and the increased rent.
A rent to own contract presents minimal risk for homeowners. Tenants have a genuine interest in the property, which motivates them to avoid damaging the house or neglecting maintenance. They strive to keep the property in good condition as they anticipate becoming the rightful owner eventually. If anything, tenants are likely to make improvements to the property rather than causing deterioration. In the event of a buyer’s default on payments, you may lose the buyer, but you would have still received income instead of letting the house sit idle on the market. All funds paid toward the house belong to you, and the property returns to your possession. Although you might be back at square one, you won’t suffer any financial setbacks.