More than ever, people throughout Illinois are selling their houses via a rent to own agreement. By selling this way, you can bypass the stress, hassles, and costs of a traditional sale. You can also get the price you want! Keep reading for our latest post outlining a typical rent to own agreement structure!
Why Do It?
There are many reasons why people choose to sell via a rent to own or lease agreement. By selling in this manner, you can create monthly income, sell at the price you want, and ensure you will have long-term “tenants” who will take very good care of the house. These are not just ordinary, tenants, these are people who fully plan on purchasing your home. They will treat it as their own, all while paying you a monthly fee to live there. You are likely to receive your monthly rent payment on time each and every month. A tenant who is renting to own will not risk losing their deposit or being evicted from a house they eventually plan on buying. You will secure yourself a long-term tenant and a sale (for the price you want) at the end of that term.
A Typical Agreement
First off, there are many parts of the agreement that can be negotiated. This is why many sellers love selling this way: they have the ability to sell on their terms for the price they want. One way many people set it up, it to create a lease agreement with an option to buy at the end of the rental term. During this period of time, you are not able to sell the house to anyone else. Instead, you lease the house to your potential buyers for a designated term. Most people set this term somewhere between 1-3 years. An option fee is paid upfront by the tenant, this acts as a sort-of down-payment on the house. It is non-refundable and acts as a strong incentive for your tenant to buy. In addition to the option fee, the tenant will pay an elevated rental fee each month. A portion of this fee can go towards the purchase price of the home. If your tenant defaults or chooses not to purchase at the end of the rental term, you keep the deposit and any money paid during the rental period. While each agreement is set up a little bit differently, routine maintenance and small repairs often become the tenant’s responsibility. This is negotiated and put into writing beforehand.
A Win-Win For Buyers And Sellers Throughout Illinois
By selling rent to own, you are truly creating a win-win situation for both buyers and sellers. Sellers will receive the price they want for the house without any hassles or uncertainty of listing. Many more buyers will have an opportunity to purchase. By “renting” the home for a certain period, buyers will be able to save up or repair their credit. The two most common blockages for buying outright in the first place. You will create an additional income stream and receive lump-sum payments both at the beginning and end of the rental term. For many sellers, selling via rent to own is the solution they have been looking for! Find out if it’s right for you!