Home Buying in Nashua>Question Details

Tom, Both Buyer and Seller in Nashua, NH

Rent to own agreement with our existing tenant in Nashua, NH?

Asked by Tom, Nashua, NH Tue Jul 10, 2012

We would love to sell our rental property to our current tenant. He is unable to get loan approval and we cannot afford to lose him as a tenant if we are unable to sell to another buyer. Is there any benefit to a rent to own agreement? Is the agreement drafted by a lawyer or a bank? Is there any benefit to us? Finally, would this hurt our credit?

Help the community by answering this question:

Answers

7
James Lowenstern’s answer
Tom, I have personally done rent to own agreements so I know the ins and outs. I need some questions answered to give you a thorough answer. What down payment or non-refundable option money does the tenant have to offer you? If it's $0 then the benefit to you would be very small and i would suggest not doing the deal. If you need to sell the property to move forward in your life then you need to price it right and sell. Feel free to call me as I have done land contracts before and I can give you better answers if we speak. Jim Lowenstern, Castles Unlimited, 617-733-8280 (cell)
0 votes Thank Flag Link Mon Dec 24, 2012
If you do choose to rent to own you want to make sure the tenant can get a mortgage in a specified amount of time, lease purchase agrements are useless if the tenant cannot complete the purchase part. You can hire a lawyer or a real estate agent to assist you with your lease purchase.
0 votes Thank Flag Link Fri Jul 13, 2012
Rent to own is not a bad thing to do if you have a good tenant paying you rent on time and is employed.You can help him to buy by getting him hooked up with a reputable mortgage person and that way they can get him on the right track to sqaure away his credit and possibly purchase your home within 2-3 years.You can also up the rent to put some money aside for him to build his down payment or go toward his closing costs.If you want to really get creative,you can offer to pay his closing costs once he's approved for a loan.In the mean time..he's paying you the rent so you can keep up with your mortgage.You also draw up the agreement at the begining so you'll both be on same page as to price.This is a win win situation.The agreement can be drafted by an attorney or an agent depending on you and the buyer.
0 votes Thank Flag Link Wed Jul 11, 2012
Rent to own is not a bad thing to do if you have a good tenant paying you rent on time and is employed.You can help him to buy by getting him hooked up with a reputable mortgage person and that way they can get him on the right track to sqaure away his credit and possibly purchase your home within 2-3 years.You can also up the rent to put some money aside for him to build his down payment or go toward his closing costs.If you want to really get creative,you can offer to pay his closing costs once he's approved for a loan.In the mean time..he's paying you the rent so you can keep up with your mortgage.You also draw up the agreement at the begining so you'll both be on same page as to price.This is a win win situation.The agreement can be drafted by an attorney or an agent depending on you and the buyer.
0 votes Thank Flag Link Wed Jul 11, 2012
If your tenant isn’t able to arrange financing today what makes you think they will down the road when interest rates are double or triple what they are today? They have been turned down by a lender, do you have more money to risk than the lender? Just some thoughts for you to roll around. If you have no real idea what their financial condition is it is dangerous to wade in deeper than a landlord/tenant relationship.

If you decide to do this speak with their loan officer to make sure the agreement you work up will fly when it comes time for them to pay you in full. I have never seen one of these work out, never done a take out loan for one and I have closed thousands of deals. See the link below for more info.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Wed Jul 11, 2012
Hi, agree with the first responder that an attorney would draw up the agreement although I do enough lease-purchases to have some samples on hand to give you an idea of the issues to cover.

You and your tenant might also find my article, entitled Understanding the Lease Purchase, at this link http://db.tt/RFJuKqn helpful.

Chuck
603/677-2154
0 votes Thank Flag Link Wed Jul 11, 2012
good Morning - this could be a creative method of providing home ownership to your tenant and getting you out of the landlord game. Been tried and done many times before.

There are many books and local resources that can help. To answer your direct questions; 1) your benefit; typically the buyer/tenant is responsible for most repairs and expenses, you probably will get a higher than market selling price, you should get a nonrefundable option fee, you probably will get a good income stream with the interest charge. 2) i would have a local lawyer draft up the paperwork, while being fair but leaning towards your benefit. 3) i don't believe it will hurt your credit "per se" but your name is still on the mortgage thus limiting your investment oppts.

call me and we can talk more, Tim Dolan 603-320-6495
0 votes Thank Flag Link Wed Jul 11, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer