2007-05-02 03:08:47 · 6 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
i would buy the house, then hire some detroit kids to burn it, then collect the insurance
2007-05-03 05:36:18 · answer #1 · answered by Datsyukian_Style 2 · 0⤊ 0⤋
Unlike what most people think, real estate ownership other than for personal use is for purposes of generating a profit either through a sale and pick up the gains or through income generated from rentals and some with rentals and combined with options income.
If you are the owner a renting with option gives you the ability to increase the rental income that you are to receive this aspect allows you to take the risk that if the renter does not pay you will have generated more income than if you were just renting and it also provides the added security that the renter will be more dilligent since he/she they will be paying more than the going rental rates in the area.
The simplyfied version of how the programs work for both the renter and the owner is as follows:
We're in rural northern N.M. north of Santa Fe and we do them all the time. Here is a super simple explanation
There are two types of rent to own programs the seller can give
1. Rent/Lease with an option to purchase
2. Rent/Lease with a right of first refusal
Under one you execute a lease for the rental and you negotiate a purchase agreement that both parties agree to but it will not be executed until a future date. Monthly payment to rent and a portion to accumulate for the renter/buyer in the event they execute the option to purchase according to purchase agreement. If they fail to execute the additional payments become rent.
Under two you execute a lease for the rental and you execute an agreement clause within the lease that stipulates that before the owner can sell to someone who has presented an offer that owner is willing to accept that the renter has the right to match the offer and acquire the property. In some cases a certain amount of money is paid for this right in most cases only the rent is collected.
Pretty simple actually just need the right representation and the right forms. It is usually done to allow a buyer to accumulate a down payment or when a buyer is not sure of a recent job promotion
Therefore it is up to the parties to determine what works best for them not what somebody else says works or doesnt work.
Best of luck
2007-05-02 11:04:42 · answer #2 · answered by newmexicorealestateforms 6 · 0⤊ 0⤋
Is it a good idea? Yes, if your credit is weak, it's an excellent way to improve your credit scores and achieve home ownership. I do these almost weekly and have a program that I use, that not only protects the Seller and the Buyer from any judgements liens on the other party, but also allows the Tenant/Buyer to claim the Mortage Interest deduction during the time they are Leasing. Of course, this makes your net payment LESS than market rent!
Not sure where you're located but as one poster said, Lease/Options are fraught with problems if not approached properly by all parties. I use Land Trusts to add considerable extra protections for all parties involved. Contact me if you'd like more information.
2007-05-02 12:00:12 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Rent-to-own is fraught with problems. I have several friends who have been burned on it. One made 2 payments late only to find out that the deal was void with the first late payment. Another made her payments on time only to discover that the seller had plegded the property for a mortgage loan that would not be paid off for over 20 years.
If you consider going this route, make absolutely sure that your attorney reviews the contract. The contract needs to include a reasonable late period (with late payment fees of course, fair is fair) that will not cancel the contract. It also needs to include a list of any liens and encumbrances on the property, a description on how they will be cleared by the contract ending date, along with prohibitions on the seller using the property for security for any loans that are due after your contract date without your explicit approval.
2007-05-02 10:34:47 · answer #4 · answered by Bostonian In MO 7 · 0⤊ 0⤋
No get a morgatge.. Right now its pretty much the same price as renting a house and you wont own it in the end... Good luck..
2007-05-02 10:17:18 · answer #5 · answered by Anonymous · 0⤊ 0⤋
It can be on a couple conditions.
You must be able to pay your rent on time, every time. And you must be willing to complete your contract.
If you miss one rent payment they can take away your option to buy, and all the money you have put in is wasted.
2007-05-02 10:14:21 · answer #6 · answered by ? 5 · 0⤊ 0⤋