Charlotte Property Management Weekly: Wouldn’t You Want the Market to Know Your Rental is For Sale?

As a Charlotte property manager, we work with many clients who are looking to rent-to-own a home. As the banks continue their non-lending ways, this group of clients continues to grow.




To find homes for them, we look through many sources. Homes listed for rent-to-own (aka lease option or lease purchase), homes for sale, and rental homes. We approach the agents of these homes and ask if their client (the seller) would be open to a lease option arrangement; some of them are and some of them aren’t. Lately, obviously, sellers are more open to this arrangement.



Asking agents of rental homes and homes for sale whether their clients are interested in rent-to-own can be a timely process. The manual effort of calling and leaving messages, and then waiting for responses when the rent-to-own client wants to see the home now, makes it a very arduous process. Then the discussion of actual terms makes this go on forever.



However, in an increasingly illiquid market, most wanna-be sellers are turning to the rental market to decrease the short-term pain of monthly payments on their vacant homes. What they really want to do is sell (and not of the short variety).



If this is true, doesn’t it make sense to have a discussion about this prior to listing the property? The conversation would start with, “Hey, we’ll put your home on the rental market even though I know you really want to sell. Taking this into consideration, we should also communicate to the market your willingness to sell it through a tenant-buyer purchase (aka rent-to-own, lease purchase, or lease option). To do this, we need to sort out three things upfront:



1. Monthly rental price- OK, we got this already

2. Option money required upfront for lease option- 1-3% of the home price is good

3. Rent-to-own sales price- 3-5% appreciation a year probably works



By including this in the listing copy, the market now knows how serious your client is about selling (aka rent-to-selling) the home. This now turns into a potential win-win-win scenario.



Win- Seller sells their home

Win- Tenant-buyer locks into the home they want and are building up a down payment (upfront option fee) and closing costs (monthly rent credit) to purchase in 1 to 2 years

Win- Agents get paid on rental and sale



Note: Your pricing upfront for rent-to-own can also signal to the market how uninterested your client is in selling. If your client asks for a $300 rent premium per month on the rental, 20% upfront option fee, and 15% annual home sale price appreciation, it is clear that they have no interest in rent-to-selling. Actually, this would be good for other agents to know as well!



Ask and you shall receive. Don’t ask and the logic still works!



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.