Charlotte Property Management Weekly: Making Rent-To-Sell’s Story Sound like BP’s

The following are two descriptions of a $99.00 special on the same hotel suite on the Gulf of Mexico:




1. Come to our wonderful beach hotel on the Gulf of Mexico (get a suite at a discounted rate!). Yes, there is oil washing up on the beach and don’t think about eating the seafood. Please feel free to bring your own firewood as we will be burning BP’s management team in effigy at our nightly bonfire.



2. Our waterfront suites, which are normally $1K a night, are now heavily discounted and available immediately! Enjoy our two Arnold Palmer-designed golf courses, five-star restaurants, and five pools.



Which one sounds better?



Now read these two descriptions about the same service:



1. Instead of losing $2K a month on your mortgage, we can have a qualified tenant move in and make these payments for you! This is a net gain of $41K for you in their 18-month lease period! They are working with credit repair to buy your home within 18 months and are willing to put down $5,000 upfront (yours to keep). If they don’t buy your home, they’ll move out at the end of their lease. It’s a true win-win in these tough lending times.



2. Misery. Agony. It will definitely lead to eviction which means years of court battles that will make the OJ trial seem like a traffic ticket. Once the tenant moves in, your life will be drastically different. It’s like having another child; be prepared to be over to your old house weekly at 1 AM to fix the toilet. I feel I must present this offer to you, but I would highly recommend against it. Someone in my firm told me that these deals never work out. Even though there are still 19 other houses in your neighborhood for sale (including 3 foreclosures and 4 short sales), your house is the best and will get the $50K premium over what the other houses are selling for.



Now which one sounds better?



It’s amazing to see how the same exact thing can either be desirable or non-desirable depending on what version of the story is heard.



Rent-to-sell often falls into this category. And rent-to-sell has a good story to tell.



Rent-To-Sell is simply allowing a rent-to-own tenant (who wants to buy your home) move-in and pay your mortgage every month. If they qualify to buy your home, they probably will. If they don’t, then they move out at the end of their lease.



Another way to explain this is that rent-to-own and lease options are the same things. “Lease option” is a combination of a lease (we know what this is) and an option (they have the exclusive right to buy your home while they live in it). Isn’t that reasonable?



I am an unabashed proponent of rent-to-selling vacant homes; I don’t see my optimistic view as idealistic. BDF Realty is a property manager; we place tenants (and rent-to-own tenants) all the time. Almost all of the tenants we place pay rent every month. Almost all of the tenants we place treat their homes with respect. Some of the rent-to-own tenants in our properties buy the home they are in before their lease expires; some don’t. This isn’t rocket science.



The thing that I’m pessimistic about is a vacant home that is on the market for months on end. That’s expensive and will bleed you dry.



So, maybe I’m a simple guy. Playing 36 holes and lounging by the pool all day for $99 a night sounds like a good deal.



Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which specialize in rent-to-own (lease options) and rent-to-sell homes. You can contact him directly at Brett@BDFRealty.com.