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Why Rent To Own


Why Rent to Own?  There are a few reasons why investors love rent to own as an investment strategy:

1.  Less work:  The tenant is responsible for the maintenance of the property, and some of the cost of repairs.  Therefore, the property is typically more hands off for investors than a traditional rental property is.

2.  The term is shorter than a buy and hold:  Most rent to owns will be set up for 1 to 3 years.  Investors like that they can take their cash and reinvest after this shorter term.  It is also a good strategy if you are waiting for another investment to materialize in the future, to tide you over until that comes to fruition.

3.  Help tenants become owners:  There is nothing greater than the pride of owning your own home.  However, sometimes things happen, and people cannot purchase a home.  A few reasons could include; no down payment, recent divorce or bankruptcy, new to Canada, new self-employment, and poor / no credit score.  Rent to own allows the tenant to live in the home that they want to purchase, before they can actually purchase it.  Maybe it gives them a yard for children or pets to run around in.  Tenants are grateful for the opportunity that the investor gives them.

4.  Great possible return on investment:  Assuming no major issues arise with the property, you can typically look at a great return on your investment with rent to own.  It is also possible to allow a contingency for unexpected large repairs within the rent to own agreement.  Rents charged will usually be higher than typical rental rates, should the tenant have to default on exercising their option to purchase.  All in all, these are great benefits for an investor.