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What would I need to do to have tenants rent to own my house?

I am currently rentling out my house and the tenents want to rent to own. How does that work?
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July 16 2012 - US
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Answers (3)

Also, just know that who pays taxes and insurance is negotiable. There is no "stead fast" rule. These types of transactions can be written up by an attorney OR by a REALTOR and each transaction can be laid out differently. Also, in CALIFORNIA, "non-refundable" deposits may be illegal. Vergabe is quite important...you can still have a deposit released to seller as liquidated damages but my understanding is that the verbage "non refundable deposit" is no longer allowed.

It's important you speak with someone that has experience with these types of transactions...sometimes called Lease Options and /or Owner Carry Backs.

A good REALTOR should be able to explain the differences of these types of transactions to you!

Good luck,

Team Kern
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July 16 2012
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Thank you very much for your response! I really do appreciate it!
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July 16 2012
Profile picture for wetdawgs
Rent to own:

Establish a price upfront.

Ask for a substantial down payment (10 to 20% seems reasonable).  This is non-refundable.

Figure out market rental rates and then add an amount above that to contribute towards purchase.  

You still pay the mortgage, taxes and insurance.

Establish a time frame until they have to get traditional financing.  If they aren't able to get traditional financing  in the time frame established, they lose their down payment as well as the extra amount they were paying each month for the property.

Have  a contract written up by a real estate attorney.
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July 16 2012
 
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