Exploring the rent-to-own approach when selling your property can be advantageous for both parties involved. This arrangement allows the seller to receive rent along with additional payments, while granting the buyer the opportunity to live in the house before committing to a purchase. There are two primary types of rent-to-own contracts: the option to buy and the agreement to buy. With the option to buy, the renter has the choice to buy the property at the end of the lease term, whereas the agreement to buy mandates the renter to purchase the property upon lease expiration. This setup provides the buyer with the time needed to accumulate a deposit and devise a suitable financial plan. In the event the buyer is unable to secure financing, having the option contract in place alleviates any legal complexities and spares you from potential legal expenses.
Negotiations
When selling your house via rent to own in Edmonton, you can expect to negotiate the terms of the contract in your favor. You can have the buyer maintain the property and make the repairs to the house, except for some repairs; make sure to research your local laws. You can negotiate the rental length, the amount of extra money added to rent towards the deposit, and how much the option fee will be.
Different Market
You will have a much broader market when selling your house via rent to own in Edmonton, AB. You will have plenty of buyers to choose from since a lot of people are interested in “trying before buying.” This gives the potential buyer the option to buy the house after living in it for a few years, which is great news to them! They will have the chance to fall in love with it or decide maybe it isn’t the best house for their family before committing to homeownership. If they decide not to purchase it, you can turn around and list it as a rent to own house again!
Higher Sales Price
When selling your house via rent to own in Edmonton, you can expect to have a higher purchase price locked in if the renter does decide to buy the house. The buyer will be willing to pay more to have this great opportunity. Also, the locked-in purchase price can be a great sigh of relief, especially if the market does not appreciate as much as you were hoping since you negotiated the purchase price.
Additional Fees
When you sell your house via rent to own in Edmonton, you are expected to place an option fee on the rent to own contract. This allows the renter to choose to purchase the house or not at the end of their rental term, which is typically 3 years. This option fee is non-refundable, even if they do not choose to purchase the house. Also, there is usually an additional amount added to each month’s rent to go towards a deposit on the house and in a lot of cases, this amount is also non-refundable.
Monthly Payments
If you don’t need to sell your house right away, you can expect to have a monthly income for at least 2 years, usually 3 years when selling your house via rent to own in Edmonton. This can help to pay your own mortgage or add the extra funds to your investment pool for additional investments. You could also save that money for a different large purchase or create a savings account for something special.
In summary, Rent-to-own is a beneficial method for selling property, as it allows the seller to receive rent and additional payments while allowing the buyer to live in the house before committing to a purchase. There are two main types of rent-to-own contracts: option to buy and agreement to buy. The option to buy allows the renter to buy the property at the end of the lease term, while the agreement to buy mandates the renter to purchase the property upon lease expiration. This setup allows the buyer time to accumulate a deposit and develop a financial plan. Negotiations can be made in favor of the seller, including rental length, additional rent, and option fee. A broader market is available, with potential buyers interested in “trying before buying.” A higher purchase price is locked in if the renter decides to buy, providing a relief in case the market doesn’t appreciate as expected. Monthly payments can be made for at least two years, potentially helping to pay mortgages or add funds to investment pools.