Charlotte Property Management Weekly: What’s the Difference Between “Rent-To-Own” and “Rent-To-Sell”?

Another popular question I hear from prospective clients is:




PC: “What’s the difference between rent-to-own and rent-to-sell?”



Us: “There is none!”



PC: “Well, if that’s the case, why don’t you eliminate the whole “rent-to-sell” terminology? I’ve heard of rent-to-own, but this rent-to-sell thing is new to me.”



Well, it’s a matter of perspective. A rental tenant who aspires to be a buyer would use rent-to-own as the correct terminology. Example:



“I want to rent-to-own this house. This means I’m going to rent the house, work on my credit until I can buy it, and then buy the darn thing before my lease is up!”



Most people get this part of it pretty easily.



Then there is rent-to-sell. This hasn’t been in the limelight until the past year or two, but has been picking up a considerable amount of steam in this poor economic environment. Now as more sellers have vacant homes sitting on the market and qualified buyers are nowhere to be found, they need a new solution to sell their homes.



So the sellers market their homes as rent-to-sell. They want renters to lease out their houses, make their monthly mortgage payments, and then buy them sometime during their lease period. If they don’t, that’s okay. They can then just rent-to-sell them again when the tenants move out.



To simplify, buyers rent-to-own (I want to rent and then buy the house) and sellers rent-to-sell (I am willing to rent my house out and let the tenant buy it). It’s that simple.



A more advanced example: A rent-to-own tenant would be looking for home sellers who would be willing to rent-to-sell their home to them. The rent-to-own tenant would lease the property, build their credit and down payment up during their lease period, and buy it from the home seller. Then the home would be considered “rent-to-sold.”



Yes, terminology can be confusing at times. But as more consumers and real estate agents are learning in this economy, knowledge of rent-to-own and rent-to-sell is imperative to housing liquidity.



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.