When working with a potential lease option seller, they sure will have questions to ask before they agree to a rent to own arrangement for their house. It is your job as the informed real estate investor, and the person connecting the buyers with the sellers, to solve those questions and allay any fears that they have.
Below are the questions that you’ll be faced with, and the answers you should provide to put any doubts to rest so you can move on to finding the right buyer :
– The mindset of a buyer is an ownership mindset, not a renter mindset; they will not want to damage the property because they are working towards ownership.
– The buyer may actually improve the property.
– Why would someone earning credits towards purchase purposely damage their home?
– They will make a substantial down payment, which they would lose, should damage occur.
– As a homeowner, you will have hazard insurance to cover any eventualities.
– Buyer tenants will move out with notice.
– If no notice is given, you just resell it and you keep the option deposit.
– An escrow company can collect (for a fee of around $50/mo.). I use Avalon Escrow Company to handle all payments and transactions.
– Title company can collect the money.
In addition to addressing their top questions, you’ll have to mention the financial benefits to a lease option arrangement. In some cases, you’ll have to convince someone to consider rent-to-own instead of just renting, they will not have to worry about the following fees:
a. Vacancy fees – 1 month out of 12 the house will be vacant – 8%
b. Management fee – Some effort to collect rent, pay the mortgage, handle questions, repairs, etc. – $100/unit typical management fee – 5-10%
c. Maintenance fee – Utilities, appliances, landscaping, etc. With a rent to own, you don’t pay for any of these expenses, the buyer-tenant does – 5-10%
Source : ezinearticles
To learn more about the benefits of lease options and how they are a smart choice for today’s savvy real estate investor, visit http://bit.ly/TipForEarningMoney