Renters Aren’t Taking Advantage of Rent-With-Right-to-Purchase Program

Renters face many problems that they wouldn’t face as owners.  Not only do they face uncontrolled rent increases, they don’t even know that their lease will be renewed. There’s always the risk that their landlord might sell the home and the new owner will want it for themselves or another tenant.

Both problems are made worse if the tenant has no lease at all or has transitioned to a month-to-month lease — quite common after the initial lease term expires. 

And the selection of new places to rent is small. If a tenant has to find a new place to live, he or she will be hard pressed to find a home they like — even more so if they have a pet.

Wouldn’t it be great if a renter didn’t face those problems of uncontrolled rent increases and having to move?  For a couple years now, Golden Real Estate has worked with a buyer who gives tenants a 5-year rent schedule and can’t be kicked out as their lease is renewed each year through that 5-year period. I’d like to see more renters take advantage of it, even if they aren’t buyers.

Our buyer is Home Partners of America. They not only address those challenges, they expand the number of homes from which to choose.  (And having a pet is not a problem.) That’s because Home Partners will buy any townhome or home on the MLS for which the renter has been pre-qualified as the tenant. Get your invitation to apply from Golden Real Estate, and once accepted as a tenant, you log in to HomePartners.com, which has every home on the MLS which you are qualified to rent.  Instead of just displaying the sales price of the home, it displays your personal rental price. 

Your contract with Home Partners, which is now your landlord, includes the rental amount for years 2 through 5, but you’re under no obligation to renew. Your contract also includes a purchase price for each year in case you like the home and decide to purchase it at any time during the 5-year period.

Call any Golden Real Estate agent at 303-302-3636 if you or someone you know is interested.

Just in Time: A Breakthrough in ‘Rent-to-Own’ for Those Who Can’t Buy Now

Real_Estate_Today_byline      It’s not uncommon for us to get a phone call or drop-in from someone who would like to buy but who might not be in a position do so at this time. They are looking for a rental, and for that we refer them to trusted companies that specialize in rentals. Sometimes the caller or visitor will inquire about rent-to-own, but we explain that it is nearly impossible to find a seller in this market who would consider rent-to-own when they can sell now for top dollar.

I’m happy to announce a breakthrough. Last week our office was presented with a new business model that could fill this gap in the real estate market. The way it works is this: we submit the prospect’s name to a company which, upon approving the person as a tenant, agrees to purchase a house, which that pre-approved tenant can rent.

Once approved, the prospect goes on the company’s website which contains all the MLS listings (sub-ject to company approval) that qualify for this program. The homes can range in price from $100,000 to $550,000. Only townhomes and single family homes qualify for this program — condos do not.

If you’ve looked online for rentals, you are familiar with the limited inventory of rental homes.

The fact that the sellers and listing agents of the qualified MLS listings are offering their homes for sale, not for rent, doesn’t matter. If a prospective tenant finds a for-sale home they’d like to rent, our partner company can offer a lease for that home which states what the rent will be for the next five years, and which also provides a pre-determined purchase price for that home over the same 5-year period.

Let’s say you find a $500,000 home you’d like to rent.  If you click on that listing, you’ll find the following grid of rental and purchase prices:

Rent_to_own_grid As you might expect, these figures are subject to adjustment, since (1) the listed price may not be the final sale price, (2) the home may need renovation work, and (3) there may be other costs associated with purchasing and owning the property. These and other conditions are spelled out in the lease agreement that is signed by the prospective tenant.

At that point, we represent the rent-to-own company in negotiating a purchase of the identified property. To the seller and to us as a buyer’s agent, it’s an ordinary transaction by an investor.   In this case, however, the investor has already identified a qualified tenant for the property.

Although the landlord is bound by the specified rents and purchase prices for five years, the tenant is only locked into a one-year renewable lease and can choose to purchase the home at any time.  They can also choose to not renew the lease and simply walk away.

This flexibility will be particularly attractive, I expect, to people relocating to our area who may be able to buy immediately, but don’t want to lock themselves into purchasing the first home they find. They can rent a home they think they might want to buy, then buy another house after the first 1-year lease period is up.  They can also opt to exercise their option to buy the house for a pre-determined price — an increase over what their landlord paid for it.

Home_Partners_screen_shot  At right is how an MLS listing appears when displayed on the company’s website, showing the listing price on the right and the estimated initial rent on the left.

Although the prospective tenant is not our client — the landlord is — we set up showings for that tenant just like we would for any buyer. When the tenant identifies the home they’re interested in, we tell the company and together we go about buying the property so that tenant can rent it.

If you or someone you know can’t (or doesn’t want to) buy at this time, have them call any Golden Real Estate agent at 303-302-3636 or send an email to info@GoldenRealEstate.com.