One of the most important things that will determine the success or failure of your rent to own program is choosing the right propert
ies. I am sure that you have heard horror stories about people investing in real estate and losing out in the end. However, choosing the right properties will draw in the right type of tenants and you are instantly decreasing your chanc
es of loss. If you buy a problem property, it is going to attract problem tenants so be sure that you take your time choosing your rent to own properties.
Attract the Right Tenants with the Right Rent To Own Property
The first thing that you should keep in mind is to avoid multi-family properties. This type of property is also known to attract transient tenants. These types of tenants will typically change jobs frequently, change relationships frequently and are not likely to stay in the home for long. These are the type of tenants that you want to avoid; because the financially cost of restoring the property due to a high tenant turnover rate can be substantial.
Be careful of a property that po
ses a deal that seems too good to be true is that most of the time it really is. The problem that you will commonly find with properties that are flexible on selling price is that the tenants that these properties appeal to are the type of tenants that you want to avoid. This is a bad idea because it may take longer to find a tenant which leads to
you having to pay the full cost of the monthly mortgage out of pocket. If you are losing financially each month, you may become desperate which can cloud your judgment and cause you to choose the wrong tenant.
How to Attract the Right Tenants
You want to attract tenants that are stable in both their lives and their jobs so that they will have the ability to pay their rent on time each month. People who are stable are also more likely to put down roots in a neighborhood, which increases your chance of them fulfilling the sale at the end of the lease agreement. So, how do you attract these types of tenants? It’s simple; buy nice homes in nice areas that are family friendly.
Large rental homes are in demand, so when choosing a rent to own property, choose the largest home that your budget can afford. Most of the time rent to own buyers are starved for space or have families to accommodate. However, you simply must not sacrifice square footage for a bad neighborhood; make sure that the property is in a good area and has plenty of curb appeal. Make sure that the rent to own property that you purchase is in pristine condition both inside and out. A fresh coat of paint and new carpet are a quick and inexpensive way to give any property a facelift.
Things to Consider
When buying a rent to own property you need to keep in mind you will not own the home for long. Because of this, you will not need to typically worry about major things going out in the home such as windows, roof, furnace or air conditioning while you own the home. By choosing a rent to own property that has at least five years of life left in in; you can reduce the amount of investment that you will have to make towards repairs.