The world of real estate listings tends to be split between homes for-lease and for-sale. Rent to own homes sits right in the middle of these, but the rent to own, or rent with option to buy, is not always explicitly promoted by sellers. The reason is some sellers think they prefer, and believe they can pull off, a quick traditional sale, while others simply have not yet considered selling by offering to rent with an option to buy...yet.
Offering a home as a rent to own is a logical next step for many sellers. Sellers rarely price their homes low enough to sell fast, and most do not enter the selling process with a non-traditional approach, like rent to own or lease option purchase, in their initial sales strategy.
Although rent to own is considered a non-traditional sale, that doesn't mean it is not as effective as any other channel for buying a home. Because these arrangements require a little more creativity and up front work, they are often overlooked. But, having such an important goal in mind (buying a home) that is so meaningful (housing you and your family) and special (this may be the largest and most important purchase in your lifetime), a little extra effort can pay big dividends later in the form of your dream home.
That's not to say you can't easily identify rent to own houses. The quickest source of rent to own listings is to search a database of homes already tagged with an offer for rent to own. When browsing for-sale listings, sellers who have already decided to offer a rent to own lease option will include notes such as "Lease Option Available", "Owner Financing" or "Rent to Own" in the listing's description. These homes are clearly the first choice for any buyer interested in buying a home with rent to own.
Since the lease purchase option agreements are not one-size fits all, they offer great flexibility for all types of sellers and property types. This means the buyer's potential options with rent to own homes are huge. In reality, most homes that are great fits for a rent to own arrangement are not yet marketed that way. Many sellers may not have considered or even know about the benefits of selling their home as rent to own. The key is finding motivated sellers.
Motivated sellers are great prospects because they tend to be more open to creative sales arrangements. In a word, they are flexible. Examples of these types of sellers include:
- Sellers with a home for sale for more than 120 days
- Sellers involved with a job transfer requiring a move to a new city
- People who have already bought a new home and still need to sell their current home
- Newly married couples who previously owned separate residences
- Homes owned as a result of an inheritance
- Owners, or landlords, of rental homes that are self-managed by owners who wish to sell off the rental
In general, all these sellers are in plain sight, but might not be plainly visible. Their homes may be currently listed available for rent, or For Sale By Owner, or even listed for sale with a Realtor. But they have not yet turned to, or been advised of, the benefits of a making a rent to own sale.
Finding Listed and Unlisted Rent to Own Homes
Listed Rent to Own Homes
Start with our listings database of homes available . Listings that already include a rent to own option in the seller's property description are tagged as rent to own or 'owner financing available' in search results. Sellers of these listings have already considered their unique situation, have embraced the concept, and are actively pursuing this type of sales approach. The types of homes already listed this way can include single family residences, condominiums, townhouses, mobile and manufactured homes.
Unlisted Rent to Own Properties
Homes formally listed at rent to own are only one piece of the market, however. Remember, many more motivated sellers not have formally listed their homes for rent with an option to buy. One of the keys to making a great deal on homes for rent to own is to find homes not already competing for other rent to own buyers. This is accomplished by identifying motivated sellers. There are several ways to find motivated sellers, including searching with:
- For Sale By Owner, or FSBO, listings
- Home for Rent ads
- Home builders in distress
- Buyer advertised rent to own interest
- Real estate agents
Each of these approaches to finding motivated sellers, and ultimately reviewing a broader selection of rent to own properties, involves some effort to reach out and engage the seller in a conversation about the rent to buy solution. Fortunately, the approach to take with each motivated seller is basically the same. The most effective way to approach these sellers involves:
- The buyer showing a nice level of interest in the property for sale or rent
- Exploring the owner's willingness to discuss or consider a rent to own purchase
- A brief explanation of how the rent with option to buy would work
- Taking next-steps