It seems that just as you begin to get a grip on how things are going in this economy, it suddenly changes. What was a flourishing housing market has slowed to a crawl. Home prices are going down and sales are following suit. This is the most challenging period for both buyer and seller as buyers cannot make purchases due to high-interest rates and sellers have a far smaller pool of options to consider.
Rent to Own Benefits for the Seller
Before you get angry, consider the benefits and importance of raising rates. Short-term economic problems will be felt. However, if home prices were to continue at the pace things were getting to, half of the middle class would have been unable to even rent a one-bedroom apartment within a matter of five years. That’s how expensive and difficult things were becoming and raising interest rates immediately slowed down inflation as well as skyrocketing home and rent prices.
While most are forced to spend this time waiting for rates and markets to cool, others do not have that option. For whatever reason, you need to unload your property and this is not the right time to do it. You may have missed the window to get your home sold quickly and easily, but there’s still a window to take advantage of the high prices and that is with rent-to-own which offers you a variety of benefits.
Larger Group Of Potential Buyers
Rent-to-own is just as it sounds, a deal that allows someone to pay you rent for the house rather than one lump sum. There are many advantages on both sides to this type of transaction beginning with increasing your pool of potential buyers. Because rent-to-own deals eliminate the challenges for buyers to have a large down payment, high credit score and so forth, more and more people become qualified to take an interest in your property.
If your home was estimated to be worth $400,000 at the beginning of 2022 but you cannot find an offer over $350,000 right now because of increased interest rates, utilizing this strategy gives you the opportunity to get that original value or even more because you are saving the buyer at least $100,000 as far as interest goes. There can also be agreements made where the renter covers additional expenses to ensure that the property does not cost you anything moving forward.
Take Advantage Of Higher Rent
Another reason to consider changing your strategy and not selling the property immediately is because of the increased cost of rent. If a two-bedroom, two-bath house in your area costs $3,000 a month to rent and you could offer your home to a buyer at the same cost, what is a better deal for the buyer?
Long-Term Income Without Immediate Loss Of Property
Investors also love the idea of a rent-to-own deal on their properties if they have no mortgage or low monthly payments. The renters tend to take better care of the property because they own it and may also be willing to cover costs for upgrades on the house and key additions like a new room or a pool because they are living there, especially since they did not have to use their down payment on a loan. Even better, you still own the property until you are paid in full. If they leave after five years, the property is still yours.
There are always advantages and disadvantages to each option which is why there is more than one. You have to consider all your options based on what you owe on the property, your reason for selling, the value, the condition and more.
