As a homeowner if you are even open to the idea of selling your home, renting to tenants with an option to buy is usually a great thing, here are the pros and cons.
Benefits of Renting your house with an option to buy
Usually you are charging a higher then normal rent because a portion of their payment will go towards their down payment. For example lets say the normal rental rate is $2000 per month, you might set up something where your renter is paying $2300 to $2500 so $300-$500 per month goes towards their down payment if they exercise their option to buy it. Should they not choose to buy it however you just collected some extra rent. Another benefit is your tenants will probably treat their home better then if it was just your house, its going to be their house and they will treat it better most of the time. They are also more likely to improve the house as they plan to be purchasing it at some point in the future.
Negative effect of renting your house with an option to buy
Really the only negative is you set the price at the time the lease option is set up, so if the market it trending higher you wont participate in that additional appreciation, your renter will, assuming the exercise the option to buy.
For more information on lease options in Newport Beach please contact one of our knowledgeable realtors today.
What crazy & wild ride we had and David was by our side the whole time! My wife and I purchased our first home and closed on Dec 31st 2013. During our process we visited countless homes and made a few offers creating a true journey through the Huntington Beach & Costa Mesa province. David was there the whole way showing up with short notice and getting comparable pricing in the local neighborhood so we could make a better decision for the purchase of our home. Although he is not superman he could be a close second to the Great American Hero! Well informed and easy to communicate with; I would recommend David to friends and family for sure. After we closed on our home we began to receive a monthly subscription to David's friendly neighborhood publication. My wife uses the recipes when she makes dinner in her new kitchen. Thanks David keep up the good work! - Ryan B.