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rent to own by Ted B (AZ) on May 30, 2018 @13:06

Has any LL done/doing rent-to-own in AZ? I was wondering if anybody can recommend good form in AZ or real estate attorney in Phoenix?
- What is the size of the credit to the tenants monthly? I see 25% i.e. if rent is $1000 then $250 go to the tenants as credit for the purchase.
- Any instruments to protect seller if real estate goes up a lot during the lease period.
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Re: rent to own by Anonymous on May 31, 2018 @06:35 [ Reply ]
I think the 25% number is reasonable credit toward rent purchase.
Could add into a contract no less than 5 or 10 percent of current market value at closing on final price.
But that could hurt you as well if value goes down.
Right now I would lock in current price
We are in a bubble that is ripe to crash in the next few years . More than likely you will get your property back when this happens by default.
Get a decent deposit from potential renter. And enjoy the ride.
Re: rent to own by Anonymous on May 31, 2018 @08:44 [ Reply ]
I have always been of the opinion that rent to own or purchase option or whatever the wandering snake oil salesman of the day labels it,.....are a disadvantage for the LL, gives tenant more contractual control of your property than a LL would like, is to the tenants benefit / advantage and the real problem is structuring the deal so that the LL has enough upside and rent premium paid for the option and the T has enough skin in the game to actually exercise. The gross monthly rent amount must be significantly above prevailing market and that fact creates a bunch of challenges. Tenants are tenants because they're tenants,....and when the LL adds 10 to 25% to the monthly rent to cover the ''option'',.....your tenant,.....who probably is challenged to meet a market rent payment to begin with, really going to struggle to get you paid every month.

Personally,....i don't like having to chase after my money every month,....and I don't do it for very long.
Re: rent to own by anon on May 31, 2018 @19:03 [ Reply ]
Oh, no. You do not credit a tenant monthly in a rent-to-own contract.
Re: rent to own by anon on May 31, 2018 @19:49 [ Reply ]
This is bothering me. The 2 comments are incorrect. A rent-to-home OPTION contract is not a simple one to create. And you as the owner create it in conjunction with a real estate attorney. For example, did you: think of who pays the property taxes, who pays for all repairs, who will get the document signed, notarized, and recorded in the county. Did you think about how easy it is for renters with such a contract to discontinue paying the rent, ruining the property, holding over when you try to evict. Are you becoming a mortgage lender in the process--holding the note? Are you planning to report your interest income and rental income to the IRS and pay taxes on it? There is so much more. Please buy a book and study this seriously at a minimum. But do more than that. I took a seminar about 10 years ago on the complexities of this very topic. I wish I could send it to you but it is copyrighted material. What I took home was that one should stay away from rent-to-own option contracts UNLESS you own a property that you need to sell and you cannot find a buyer. Do you know what an option is? Do you know the particulars of the option? Etc.
Re: rent to own by anon on June 1, 2018 @19:11 [ Reply ]
I re-read my last post and I sound rude, which was not my intent. I apologize for any offense; I just wanted to convey the complexities. Good luck.

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