Buying Investment Property How to Find Rent to Own Homes for Investment by Charles Mburugu September 14, 2020September 14, 2020 by Charles Mburugu September 14, 2020September 14, 2020 The typical process of purchasing a traditional or Airbnb investment property involves saving up enough money for the down payment, getting pre-approved for a loan, and finding a home for sale that fits your budget. However, this process doesn’t always work for everyone. You might not have enough money saved up for a down payment. Or your bad credit score could disqualify you from getting a mortgage. The good news is that there is an option; rent to own homes. What Is a Rent to Own Home? A rent to own home is a property that you purchase via a rent to own arrangement. With this kind of contract, you agree to rent a house for a specific duration before gaining ownership. This duration could range from a few months to years, depending on the terms of the contract. There are two different kinds of rent to own agreement; a lease-purchase agreement and a lease option agreement. With the lease-purchase arrangement, you are legally obligated to buy the property. However, the lease option agreement gives you the option of buying the income property after a specified time period. Related: Rent to Own Homes: A Real Estate Investing Strategy for Beginners A typical rent to own agreement involves these components: Purchase price – The agreement will specify when and how the purchase price will be decided. It could be based on the investment property’s current value or an anticipated one. In some situations, the price is settled when the seller and buyer sign the contract. At other times, the buying price will not be made official until the lease expires. Rent payments – The contract will also specify how much you’ll be paying for rent each month. These payments are usually higher than rent prices in the neighborhood because a percentage will be set aside towards the future purchase of the rental property. Maintenance – The agreement might require you to cover costs like property taxes, HOA fees, repairs, and maintenance while you are renting out. Be sure to peruse the contract with an attorney to understand what each party is responsible for. Option money – You will be expected to pay the seller a non-refundable, one-time fee. This amount is usually a percentage of the property’s purchase price. Lease term – The contract will indicate a specific lease term. If the lease expires and you either change your mind about the purchase or cannot qualify for a mortgage, the option to buy will expire. You might be forced to forfeit any payments made during the lease, including the option cash and rent credits earned. Related: Rent to Own vs Owner Financing: Understanding the Difference How Do I Find Rent to Own Homes Near Me? Wondering how to find rent to own homes in your neighborhood? Here are some of the strategies you can use to search for rent to own homes for sale. Consult an experienced realtor In your rent to own investment property search, one of the wisest things you can do is work with a local real estate agent that has some experience in rent to own transactions. Through their knowledge of trends in the geographic area, their extensive real estate networks, or specific MLS searches, an agent can help you find investment properties for sale that fit your strategy and budget. An agent will come in handy when negotiating the rent to own agreement. At times, such agreements come with lots of unfamiliar terms and conditions. If you are not careful, the seller can take advantage of you. Having an experienced agent working in your best interest will protect you from a bad real estate deal. Before hiring an agent, here are some of the questions you need to ask: How many rent to own deals have you conducted? Are you familiar with writing a rent to own agreement? What advice can you offer to someone looking for rent to own traditional or short term rental properties? Find a great real estate agent today in the city of your choice. Search rent to own sites One way to find rent to own homes is to turn to real estate websites dedicated to this property type. This is another great strategy for anyone wondering how to find rent to own homes. There are numerous sites out there that are designed to connect owners of rent to own homes with potential buyers. Here are some of the sites you could look at for rent to own home listings: HousingList – This site allows you to narrow down your search for rent to own homes by location. However, you will have to sign up for a trial membership first before accessing all the details about a particular home. Signing up also gives you access to more features such as the ability to check your credit score and access the neighborhood demographics. Rent to Own Labs – This website lets you narrow your rental property search by zip code, state, or city. Just like HousingList, you must register first before accessing information about a particular property. After registration, you can also access the contact details of the current homeowner. Foreclosure.com – This website has a whole section dedicated to rent to own homes. You can filter your search results by property type, the number of bathrooms or bedrooms, or your anticipated price range. Craigslist –Craigslist is the best place to find rent to own homes for free. All the details are available, including the contacts of the property owner. For example, if you are looking for property in the NJ housing market, all you need to do is Google ‘Craigslist rent to own homes in NJ’. You will see results showing rent to own properties in Central, South, and North Jersey. You can narrow down your search by price, miles from zip code, square feet, number of bathrooms or bedrooms, availability, and open house date. Don’t forget that you need to analyze your rent to own home if you plan on eventually renting it out! You can enter the address of any investment property into Mashvisor’s database and receive a full property analysis report. Try it out now. Look for a company with a rent to own program Some companies have dedicated rent to own home programs that are designed to connect buyers and property owners. A good example is Home Partners of America that operates in multiple markets including the Atlanta, Baltimore, Charlotte, Asheville, Austin, Birmingham, and Chicago real estate market. Qualified potential buyers work with licensed real estate agents to find the right property that fits their budget. Another company worth considering is Divvy Homes which operates in the Phoenix, Memphis, Dallas, Cleveland, Tampa, and San Antonio real estate market. Reach out to owners of lingering homes Another great strategy for how to find rent to own homes is to contact property owners and sellers that have properties listed in the market. You should especially look out for listings that have been on the market for a long time. Out of desperation, the property owners might be willing to discuss the possibility of a rent to own arrangement. If you decide to pursue this for sale by owner (FSBO) strategy, you need to get a real estate attorney or agent involved. Since most people don’t understand how the idea of rent to own works, it would be wise to have an expert do the explaining. The attorney or agent will also help you negotiate a good deal. Related: Buying a House For Sale by Owner: 6 Tips for Real Estate Investors Conclusion Anyone can learn how to find rent to own homes in their area. Whatever real estate investment strategies you use to find rent to own property, be sure to protect yourself from any potential pitfalls. Work with professionals, have everything in writing, and do your due diligence before making a decision. Start Your Investment Property Search! START FREE TRIAL AgentLease OptionProperty SearchReal Estate WebsitesRent to Own 0 FacebookTwitterGoogle +PinterestLinkedin Charles Mburugu Charles Mburugu is a HubSpot-certified content writer/marketer for B2B, B2C and SaaS companies. He loves writing on topics that help real estate investors and agents make better choices. Previous Post Don’t Buy Airbnb Property Before Doing This Next Post How Do You Ask for Real Estate Referrals? 8 Tips Related Posts How Do I Find Motivated Sellers? 5 Ways How to Find Foreclosed Homes for Sale to Invest In and Make Money A Guide for Finding the Best Real Estate Agents for Buying Houses for Rent Near Me Learn How to Buy a Foreclosure Home by Following These Steps What You Need to Know Before You Start Investing in Property What’s the Best Way to Find Multi Family Homes for Sale Near Me? Investment Property for Sale: Local vs Non-Local How to Find a Profitable Investment Property for Sale: Our Guide Is the Las Vegas Real Estate Market Good for Investment Properties? The Beginners’ Guide on How to Buy Investment Property How to Find Cash Flow Investment Properties Find Income Properties the Smart Way Using Mashvisor 2 Comments Vickie Blackwell September 15, 2020 - 5:20 am Thank you so much for the information! I owned a home once when I was 25 but my husband didn’t put my name on the lease. Then my 2nd husband’s mother purchased us a home without my name on it. I became ill and ended up needing full time care so my husband left me. I was successful and well respected then , managing restaurant and retail business for 25 years. Then I lost everything! I am now 55 with no savings, 401 K, barely keeping a vehicle in my driveway. I live in poverty and spend my days and nights. Trying to learn the real estate business on my own. When I first became ill I was put on 15 dif. Meds most being narcotics such as Fentenyl , oxycotin, morphine,percocet , zanex and steroids ! I stayed on all of these for 10 years and have been clean for 2. I am not getting any younger. It’s been a horrible struggle and I have not asked for help from anyone except disability. I don’t know how to apply for grants and don’t like asking for money . I just want to know that I will have a home and some life insurance to leave my 3 children . Anything else I may aquire is a bonus. I am working super hard 2 get my credit score up there after all if the medical bills, evictions and failed paying my bills . My score is at a 629 now and rising with the help of lexington law. I could really use a break in life and I appreciate all the information you have offered me. I need this!! I am starving fir this and determined to succeed! Thank you for your time. Sincerely , Vickie Reply Vickie Blackwell September 15, 2020 - 5:21 am Thank you for this information! I have spent hundreds of dollars on rent to own and real estate websites!! I appreciate you! Vickie Reply Leave a Comment Cancel Reply Save my name, email, and website in this browser for the next time I comment.