Do you have a property you want to sell in the Fort Myers area? For many homeowners, using a rent to own agreement will be the most profitable way to sell their home. Learn more about how it works and what you need to do to sell your house using a rent to own agreement!
Many sellers don’t consider the benefits of a rent-to-own agreement for their Fort Myers house. This option can be highly advantageous, offering unique perks that are often overlooked. One of the primary benefits is that it allows sellers to receive a higher-than-average monthly rent, which can provide a steady income stream while the property is being rented. Additionally, a rent-to-own agreement can attract a wider pool of potential buyers, including those who may not currently qualify for traditional financing but are motivated to purchase in the future. Sellers can benefit from this arrangement if they are not in immediate need of the full sale proceeds and are willing to manage the property during the rental period. Overall, if you don’t need the cash from the sale immediately and are comfortable renting out the house for an above-average amount each month, selling your house via a rent-to-own agreement might be the best way to sell your Fort Myers house.
#1 – Cash Upfront
With most rent to own agreements, the tenant is required to make a downpayment to the seller. While this may be much less than with a standard loan, it should be enough to ensure the tenant won’t back out of their debt. You can also utilize an option fee, which is non-refundable and provides the tenant with the option to buy. This is usually about 1% of the sale price. In most cases, this option fee and a portion of the monthly rent will go toward the tenants down payment when the official sale occurs.
#2 – Generate Passive Income
As long as you have a tenant in the home, you will be generating income from the property, creating a steady revenue stream. Often, tenants in such arrangements are willing to pay above-average rent, as a portion of the funds is allocated toward their eventual down payment to the bank, incentivizing them to maintain their financial commitments. Your tenant, aware of the potential consequences of defaulting, such as losing their deposit and the option to buy, is highly motivated to remain current on their payments. This understanding provides you with a level of security, allowing you to almost rely on a continued tenancy from your tenant for as long as you own the property. By ensuring the stability of your rental income, you can effectively manage your investment and plan for the future with greater confidence.
#3 – Get The Price You Want
Tenants using a rent to own agreement typically aren’t able to qualify for a conventional loan. Whether they don’t have the down payment, the income to qualify, or the credit score required, buying via a rent to own agreement will allow people to purchase who may not have been able to in the past. As such, by having the opportunity to buy, these folks will likely be willing to pay your asking price for the property, as long as it’s fair.
Keep in mind that the value of the house could go up or down while the agreement is in place. The negotiated sale price will remain the same.
#4 – No Risk If The Tenant Defaults
If the tenant defaults, most agreements allow the seller to retain all monies paid. While this might reset the process, it often leaves the seller in a better financial position, with the flexibility to sell the property outright or seek a new rent-to-own tenant. The potential profit can be substantial, potentially amounting to thousands of dollars when factoring in the increased rent and initial down payment.
#5 – Increase The Number of Potential Buyers
In the realm of potential buyers, there exist numerous individuals who, despite their strong financial capabilities and unwavering commitment to fulfilling their financial obligations, might find themselves unable to purchase a home due to minor discrepancies on their credit reports or the inability to gather a sufficient down payment. These individuals genuinely aspire to become homeowners but are constrained by paperwork technicalities. By offering a rent-to-own agreement, you can extend a helping hand to these individuals, granting them access to a path that leads to homeownership, which they may have otherwise found unattainable. This approach not only expands your pool of potential buyers but also provides a valuable opportunity for individuals to overcome financial hurdles and achieve their dream of owning a home.