Help needed fast - ? about rent to own scenario

[Hillbeans]

We own an investment prop. in central PA with my in-laws. The house has been on the market for about 6 mos and several offers have fallen through for various reasons. Anyway, someone approached the realtor today about a rent-to-own scenario. I'm a little skeptical about this since everything (carpets, appliances) were replaced brand new and if they rent for a year and then back out of buying the property, we'll be stuck.

Has anyone ever done this? Does it work? It would be a good way to get our $$, however none of us really wants to be a landlord either. Would you apply a portion of the rent to the sell price?

HELP!

 

[Hillbeans]

Bumping -

I need to call the realtor and the in-laws back at 6:30...help!

 

[Toby'sFriend]

why are the offers falling through? Is it credit problems with the buyers or problems with the house? How long are similar properties in that area staying on the market -- are we talking months or years?

My instinct says that if you don't want to be a Landlord, then don't do it. Most lease to own situations that I've been aware of were Fix it up type houses where the buyers also put a bit of sweat equity into the house to get it up the FHA appraisal standards. I don't get the impression that is what we are talking about here.

 

[Hillbeans]

The two offers that fell through were 1) a divorce with one week left to go, they even had the utilities turned over to their name and 2) was someone who couldn't come up with the financing.

The house is in a rural area of PA and it's not uncommon for houses to be on the market for a year. It used to be a fixer-upper however we invested into it and did the kitchen, bathrooms, paint and w/w carpeting. It's not brand new, however we consider the house redone. It's not a fixer but it's worth less than $100K.

 

[Toby'sFriend]

Well - we are entering September, which is going to slow that market down even more. Do you think they would consider a 6 month lease, with a good security deposit, and first option to buy?

I personally be very reluctant to let them go for one year unless they are willing to make high enough payments to give you a decent return.

If you sign for a full year and they back out it will take you right back to September and dead housing market again next year. If you could get them to agree to 6 months, that would put the house back on the market for Spring/Summer again in 2005.

 

[Hillbeans]

Great points. Thanks Toby.