Rent to Own v.s. Just Selling

[MathMan]

    Hello, and thank you for your time.

    My wife and I live in a tight townhouse with 5 kids and are finding it diffucult to stage our house for selling while living in it.  Our neighbors wish to rent to own our small house as is, and we are excited to try this option.  We don't know or trust any rental agencies yet, but we know that a lot of companies exist with various degrees of responsiblities for all parties involved.  We are planning on moving and perhaps coming back in three years to a larger house.  I was advised to put a hard timeline of say three years on any rent to own agreement, but other than that, we have not done much research yet.  Are there good resources and or options for rent to own agreements, finding no nonsense rental agencies for our busy family life, and in general reaching out to the community for people in our situtation?

[ILoveGardening]

Get money expert Dave Ramsey's book Total Money Makeover or call in to his show. I've heard him give several ideas and warnings about your subject

[JeremyBeckhamRealtor]

This really is not a good option for either party.

1. The seller is stuck with dated rents for 3 years with no market adjustment.

2. How much of the rent are you allocating as down payment? This is less income for those 3 years.

3. Price is decided now. If it goes up in price then the seller loses. If it drops in price the buyer will never qualify their loan.

You are better to do owner financing and set it up as a balloon payment at 3 years. This way they are responsible for the taxes and insurance during that time. Your down payment will be decided by the price of the house. Typical interest rate during those 3 years are 9-16% for owner financing.