Thinking about selling your Houston house? Consider a lease option to get the price you want! Learn more in our latest post!
The Aida Group buys and sells all types of houses in Texas. Lease options (rent to own) can be one of the best selling strategies that net homeowners top dollar. This transaction allows you to get the best price and provides you with extra monthly income until the house has officially sold. Below we answer some of the most common questions about how a lease option (rent to own) strategy will sell your house in Texas.
What Is A Lease Option or Rent To Own?
A lease option will allow a potential buyer to lease the property for a specific term, with the option to buy at the end. The lease will typically last 1-3 years and if they are not able to purchase it at that point, the property will remain in your name and everyone can move on. During the lease term, the tenant will pay you a “rent” that is typically higher than average. Some agreements are arranged so some of this money goes toward the down payment if they opt to buy. However, whether they choose to buy or not, the amount you have collected during the rental term is yours to keep. So either way, you will come out ahead.
How To Set It Up
It is important to set the right terms from the very beginning. You want to make sure both parties have a clear understanding of their responsibilities and the timeframe in which the agreement covers. In most cases, you will set up a traditional rental agreement, with an option to buy at the end. There are key differences with a rent to own agreement as compared to a standard lease. First off, the tenant will likely be responsible for the repairs to the property. This will equate to even more cash that will stay in your pocket during the duration of the lease. You will also need to decide how funds will be allocated. While the rental payments are typically higher than average each month, you will need to decide where that money goes. Will, you set aside a percentage to go toward the tenant’s future downpayment? Or will the rent payments become pure profit for you? Our agreements also require a down payment or deposit of sorts to ensure good faith by the tenant.
A Whole New Market Of Buyers
Using a lease option will open your home up to a whole new market of buyers. There are tons of people out there who are ready to buy but are not quite able to get the financing they need. They are good people, who may have a blemish on their credit report from years ago. Or maybe they have been hit with an unexpected debt, keeping their loan from going through. Most time it is they don’t have the work history to get a loan. They either are self-employed or have just changed jobs so they can’t get traditional financing. By leasing your property with the option to buy, they will be able to get their credit and finances in order and then buying your property outright when the time comes. This opens the door to a whole new group of buyers who may be interested in your home. If you want more Information please contact us here.
What’s The Risk?
There really isn’t one. Worst case scenario, they don’t end up buying your house at the end of the lease. This means you will have made some good money, and the property will still be yours to do with as you please. You can opt to list it on the MLS with a whole new pool of potential buyers, you can rent it out in the traditional way, or you can take on another prospective rent to own tenant. No matter what, you will still come out ahead. This is one of the greatest ways to make residual income.