Q:

How do you set up a rent-to-own contract?

A:

Quick Answer

To set up a rent-to-own contract, a person needs to find an agent to help with the contract, set a realistic selling price and set a time frame for the purchase. The rental rate should also be at a price that the renter cannot only afford, but can also afford to save money for purchasing the home or condo.

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Full Answer

  1. Find an agent to help with the contract
  2. The first step in procuring a rent-to-own lease is ensuring that the renter, soon-to-be buyer, has an agent to help with the contract. These contracts can be difficult and it is important to ensure that the renter/buyer is not going to end up in a position where they will not be able to buy the home within the 1 to 3 year time limit.
  3. Set a realistic selling price
  4. This is one of the most important parts of setting up a rent-to-own lease. The selling price should be decided upon by obtaining an independent appraisal so that both parties are happy. If left to the future then the price might raise exponentially making it more difficult for the renter to purchase the home.
  5. Set a realistic time frame
  6. Try to create a lease with as much time as possible so that there is enough time for the renter to fix their credit. It can take a long time to fix credit and the renter does not want to have to move out without having been able to make an offer at all.
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