Lease-to-own has obvious benefits for renters, but the concept also has many advantages for sellers. The process is similar to a car lease: Renters pay a set amount every month to live in the house, and at the end of a set period, they have the option to buy the house. A portion of the rent they pay each month goes toward a down payment for the home. So how does this benefit sellers?

  • High sales price, even in a soft market:More renters will be attracted to the home if they require slow-going financing, and they may be willing to pay a premium because of the exclusive financing terms.
  • Less stress: Renters who lease-to-own are more invested in the property than typical tenants. This means they care more about your home and are usually higher-quality renters. They will treat your property as an investment in their future instead of as a place they will vacate in a year or so.
  • Higher rent: If you are flexible on your financing terms, you can ask for a higher rent payment.
  • More cash flow: More value equals more cash in hand for you.
  • Bigger target market: Instead of just targeting potential renters, you can also reach out to potential buyers. This increases the likelihood that your home may be rented and sold.
  • Minimum risk: As a seller, you can demand a non-refundable option deposit you can retain if the renter decides not to buy or defaults.
  • Tax benefits: For the first few years, you are still the owner of the home and therefore can reap the tax benefits of ownership.
  • Shorter vacancies: Lease-to-own homes often have a much shorter turnover time than typical rentals. When you decide to list your house for sale by owner with a lease-to-own option, the vacancy time is often reduced to just days or weeks instead of months. This means money in your pocket faster!
Image By: TrombaMarina
Published on 04/16/13
Return to Blog