Utilizing owner financing or a “rent-to-own” agreement is a great idea that can suit both investors and homeowners who want to secure a buyer quickly. Although the property itself won’t be sold outright until the agreement ends, offering a “rent-to-own” agreement can significantly increase your pool of prospective buyers in Florida.
“Rent-to-own” as a selling option is often overlooked by Florida homeowners due to a lack of mainstream information. However, as long as you don’t need all of your proceeds upfront, owner financing is a viable selling route to take. This article will cover 5 reasons owner financing will benefit sellers in Florida.
1. Sell Faster
When you take advantage of a “rent-to-own” agreement or offer owner financing to buyers, you’re making your property available to buyers who otherwise wouldn’t be able to purchase a home via traditional means. And of course, more potential buyers means you will be able to get a contract signed quicker.
NOTE: Be sure to do a substantial amount of background checks on your prospective borrower. If a traditional bank had turned them down in the past, there will be a reason.
2. Create Consistent Income
Owner financing involves “renting” the property to your interested buyer for a period of 2-3 years (agreed by both parties). At the end of this period, the buyer will purchase the house outright. This means during this “rental” period you’ll be able to bring in consistent income each month, with a much lower risk of a late or missed payment.
3. Get The Price You Want
Buyers who cannot purchase a property the conventional route have limited options when it comes to buying a house to own. This means they have less negotiating power since you’re in some ways doing them a favor by offering them owner financing.
In many cases, you’ll find that most “rent-to-own” buyers are eager to buy, especially if they haven’t been able to in the past. As such, you have a far better chance of securing the price your want for your home, even if it does take a little bit longer to collect 100% of your proceeds.
4. Collect More Each Month
In addition to getting a potentially better price for the property, “rent-to-own” agreements typically charge a higher than the standard amount of rent each month. In some cases, a percentage of the monthly payment will go toward the down payment on the house. However, owners can still find themselves collecting a higher than average rental check each month.
5. Peace Of Mind
“Rent-to-own” buyers are not tenants, or at least not in the mainstream sense. If you have experience dealing with difficult tenants, then you might be wary of “renting” to buyers. However, rest assured “rent-to-own” buyers aren’t going to trash your property or avoid paying the rent for no reason.
Remember, these are people who want to own their own home. If they trash it, miss a payment, or otherwise violate the agreement, they could lose their down payment along with their opportunity to purchase your home.