3 Reasons Why Rent to Own Investing Can Be Difficult in Dallas/Ft. Worth

From flips to rentals, from new builds to rent-to-owns, there are distinct kinds of investing. But which one is right for you? While you are weighing your options make sure you read this blog post where we share the 3 reasons why rent to own investing can be difficult in Dallas/Ft. Worth.

There are so many ways to invest, and smart investors are always looking for how they can take their investing to the next level with new strategies and ideas. One increasingly fashionable way to invest is with rent to owns.

Rent to own investing is where you own a property that you rent out to a tenant, but with the expectation that they intend to buy the house from you in the future. Depending on how you structure the agreement, you might collect a deposit from them at the beginning, have them pay rent for a negotiated number of years, and then complete the purchase of the property at an agreed-upon price in the future.

It can be a fantastic way to invest – but is it right for you? If you are doing your due diligence on this style of investing, then you should know these 3 Reasons:

Reason #1. Finding Tenants

Since rent-to-owns are not as well-known as renting OR owning, it can be slightly more challenging to find tenants who are open to this. Fortunately, that is changing and there are more people looking for rent to owns to live in. But not every tenant will want a rent to own or even know what it is.

Reason #2. Agreeing To Terms

Rent to owns are like any other real estate agreement – there are terms that both parties need to agree on. Those terms might include the amount of money the renter needs to pay, and when, as well as how much the house will eventually sell for. (For example, do you set a sales price today for 5 years down the road? Or do you set the price in the future?) And, as with any agreement, you will want terms that are better for you while the tenant will want terms that are better for them, so you will need to meet in the middle.

Reason #3. Responsibility

When you own a home, the responsibility for the care is obvious – YOU are responsible. And when you rent a home, the responsibility is usually well-established – the tenant is responsible for cleaning and basic upkeep while the property owner is responsible for maintenance, upgrades, and replacements.

But what about rent to own? It gets more confusing since you might have a rental agreement at first and then an ownership agreement later. So, who is responsible for the furnace or for fixing the roof? You will need to negotiate this out before a tenant moves in!

Rent to own properties can be an effective way to invest but they can also have pitfalls and challenges. And these three challenges – tenants, terms, and responsibility – are 3 reasons why rent to own investing can be difficult in Dallas/Ft. Worth. Fortunately, none of these need to hold you back if you are prepared.
Want to learn more about rent-to-owns? We would love to talk to you and help you figure out the next step for you. Call us today at (469) 969-5771 or email us at info@thepeoplesrealtygroup.com.