{Property Owner} "Your Tenant-Buyer" Chose NOT to Buy? Do This....

When you sell your home as "Rent to Own" you would do so with the intentions that the 

tenant-buyer will follow through and exercise their "Option" right to buy the home and cash 

you out. But we don't live in a perfect world, and it doesn't always workout the way you 

intended, correct? Some stats show that 30-50% of tenant-buyers exercise their Option 

right to buy the property. What should you do then? Your tenant-buyer calls you up 

someday and says something along these lines...

"Hey...I am really sorry but I can't buy your house at this time"

or they may say....

"Hey... I am sorry but I don't want to buy your house now"

At the end of the day, it's a double edge sword and it can cut both ways. It is an "Option" to 

buy and an "Option" not to buy, correct?

 

Take a break for a moment now.

Let's gather our thoughts and consider the following...

With clear understanding that most if not all sellers that we will work with would prefer to 

sell their home today at a fair market value and get fully cashed out, let's take a look at the 

alternative choices we have to choose from, assuming getting cashed out is not a viable 

option for one reason or another.

What You Get with a Conventional Tenant & Rental

You get the following from your tenant with a conventional tenant and rental:

• Someone who will constantly be requesting for you to repair stopped up toilets, leaky roofs etc.

• Someone who may trash your property

• Someone with no real interest in improving your property by investing any of their own money and improving the property value

• Someone with very little "skin in the game" since their deposit is so small, and has really no interest beyond that

• One month's security deposit (sometimes two), equal to one month's rent

 
What You Will Get When You're Selling Your Property,

"Rent to Own" On Terms...Instead of for Cash Today

With a non-conventional Lease-Option ("Rent to Own") agreements you get the following from your tenant-buyer:

• Someone who doesn't ask you to fix anything when something breaks or needs a repair, because contractually, a set amount of repair costs has been established from the beginning, of which the tenant-buyer is responsible

• Someone who will most often than not ask written permission to invest in home improvements which may increase the property's value

• Someone with a lot of "skin in the game" since their deposit is much larger than a conventional deposit, and their intentions are to own the property after the 1-3 years.

• Someone who actually want to sell their home

• A much larger, non refundable Option consideration fee

Let's Take a Look At The Worse Case Scenario

If Your Tenant-Buyer Chose Not To Buy

Let's say your tenant-buyer chose not to exercise their Option to buy your home, and 

assuming they have made their monthly payments on time for the entire term, you could 

simply take your property back. You could then repackage your home and sell it again and 

possibly even at an increase in value. If the property went up in value during the lease term, 

and the tenant-buyer decides to give you the property back, you could always sell it again 

at a higher price. Otherwise, you may decide you want to hold on to the property as a rental 

for cash flow and continued appreciation.

If the tenant-buyer fails to make their payments on time, you could always evict them 

because a Lease with the Option to buy is not a sale, contrary to the people who are 

confused with the Dodd Frankj Law etc. Understand that a Lease with the Option to Buy is 

not a sale, but rather the Option to buy the property (and the Option to not buy it), as the 

owner of the property, you, can evict the non-paying tenant-buyer just the same as you 

would if you leased the property (only) like a landlord does.

Essentially, you would get the benefits of:

• Getting a much larger down payment/security deposit known as the Option consideration fee vs. a small, non refundable security deposit

• Having a tenant-buyer who wants to take care of the property like you would, because they want it to be theirs

• Remaining on the title and in control

• Selling your property "As Is"

• A hands off experience, since you will not have to repair anything up to an agreed repair cost amount

• A potential cash flow property

• And much much more....