Rent-to-own experiences / tips?

  • Erstellt am 2022-02-21 10:57:44

Alibert87

2022-02-21 10:57:44
  • #1
Hello, good morning, I need tips / collective knowledge from you again:

We possibly have the opportunity to rent a property in our desired location and "subsequently" buy it. It is still relatively new, so I don't have fixed numbers or contract details yet. A brief background: Through commitment, we came across a great single-family house, the owner's children (retirement home) do not live here and do not want to sell the house for now. The house should keep its original charm but be completely renovated and then, as mentioned, initially rented out. However, there would be the option to take over the house after some time.

How should we best approach the topic? So the rent will be very high (about 2K give or take), but there is the chance to buy this property.
Does anyone have experience with how we can arrange this in the best possible way?

Two scenarios:
For the seller - we pay rent for about 10 years and then would have to buy the house at the market price in 10 years (without crediting the rent)
For the buyer (us) - we pay rent for 10 years, this is (partly?) credited to the purchase price now contractually fixed and then we buy the house at the remaining value

Thanks and regards :)
 

kati1337

2022-02-21 11:02:44
  • #2
Do you regulate contractually that there will be the option to buy later? Otherwise, I still see: Scenario C - VERY favorable for the seller: You pay a horrendously high rent for 10 years and then the seller says "oh no, we won't sell after all."
 

Alibert87

2022-02-21 11:22:11
  • #3


Yes, of course. We only do it under this premise. Actually, the possible purchase price should already be fixed now, because otherwise we cannot plan. Example: in 10 years the seller wants 1.5 million for it, the rent was not credited, then the property is uninteresting for us.
 

WilderSueden

2022-02-21 11:44:34
  • #4
You want:
- an option that can be chosen by you
- a price that is fixed now
- a significant portion of the rent credited

For the owner, this is effectively a sale today that only takes effect in x years. In return, he has an expensive renovation, has a tenant in the meantime, and only knows in 10 years whether he will actually get his money.
In addition, there is the option character, which is disadvantageous for the owner. If prices continue to rise rapidly, it is unattractive to sell at a price set today. If prices fall, you will not use the option but buy something else.

I see absolutely nothing here that would motivate me as an owner to enter into such an agreement
 

Alibert87

2022-02-21 11:52:55
  • #5
Yes, we are aware of that. Here it would have to go through the emotional angle: So we hold the house in honor, no demolition, etc. If the rent-to-own only works per owner, then it makes no sense for any interested party.
 

SoL

2022-02-21 12:02:28
  • #6

No, just do something both sides can live with. For example, right of first refusal at future market value with rent credited or right of first refusal at a price fixed today without rent credited or...
 

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