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Rent to own should not overlooked as source of revenue

Real Estate Agent with Southland Realtors

One avenue that tends to be overlooked by home investors is offering a rent to own option to their tenents.  There are plenty of lease option buyers, even in a slow market. It's a win-win situation for both investor and resident alike. Once the renters lock in a sales price that the investor has offered, the investor simply can't lose. The owner gets a bigger revenue stream of rent, and his house gets sold at a profit.  If the sale does not happen, the owner keeps the extra money. If the renters exercise the option to buy, they buy the house under circumstances more favorable to them (by having a down payment saved up).

Another interesting way to look at properties when considering a purchase to hold for investment purposes, is to look at the land as the appreciating part of the package, and not the house. Under this strategy, you will not usually want to deal with luxury homes. Instead, you will want to be looking at properties in working and middle class subdivisions. These houses are more likely to be in the range of most tenants and rent to own candidates, and the land will usually be the driving force in the property appreciating in price.

Good markets or bad, these are 2 strategies that should work day in and day out.  


Mario Villagran
U.S. Spaces - Burbank, CA
MBA, Realtor
Harry, Have you done any yourself?  This is interesting but I want to know if it's common practice to only credit back the amount of rent that was above market rents.
Sep 08, 2007 12:00 PM