Discussions

Looking for some insight on rent to own a single dwelling house.  
Knowledge from both sides of the party (buying or selling) would be helpful.  
Do realize a lawyer will have the answers.  
TIA  
 
Edited by HAGD, 2019-12-01 16:16:28

I have a young family renting to own a home that I  
have ...The cost per month is a little higher than if you  
were merely renting, ,The extra cost goes toward the purchase price. so if they follow thru with the  
purchase they win ..if they bail out anytime during  
the contract they lose financially . It seems to be working very well for both sides at this point. If you  
are quite sure that it is the home for you ., go for it.

I am the owner … selling. The tenants threw the idea at me 2day. So wondering if you received a down payment as in 5percent tor 10 percent down or did just the rent go towards the buying of the house.  
Your contract plz. Did u draw it up? or bank? or lawyer? or Real estate agent?  
 
And then the big Q.  
Does one claim the monthly monies u received every year or does one claim it once the house is paid off.  
Many moons from now.. lol. seems renting to own would take that long.  
 
Rent is 1250.oo monthly plus utilities. Please your insight on how much more to charge a month.  
TIA  
 
Edited by HAGD, 2019-12-01 16:38:33

 
 
Edited by HAGD, 2019-12-01 17:15:14

I think the extra portion they pay to you each month is “building up the down payment” a purchase price is set up when entering agreement. Once the amount needed for the down payment is met. They would secure their own mortgage and pay rest out to you.  
I would assume you would continue to claim the rent portion as income and be responsible for taxes. But speak to your accountant to clarify.  
One problem that can occur is market goes up or down and one of the parties gets a deal. But most of the risk is to to the future buyer.

sorry I misunderstood your position. There's quite a bit of helpful info on the web, but essentially you are in the driver's seat and can agree to whatever makes you comfortable. I added 25% on the rent and it accumulates to meet the downpayment level. At that point he can purchase it if he can access mortgage funding ...if not , he  
can continue to pay and increase the downpayment portion. The downpayment portion is non taxable. ( according to my personal research ..but do talk with a tax person) the upfront monies were 1.5 of the monthly. ..applied to the sale price of the house. (or contractual damages should he walk away)  
 
Edited by micro, 2019-12-03 21:21:53