Rent to own

Answered December 10, 2008 10:12. This can be done either as a rent-to-own or a land contract sale of your home. In either case, you need to have the buyer/renter sign a contract outlining the terms of the transaction. I would contact an attorney to help you with this. The attorney can discuss the pros and cons of the rent-to-own v. land contract.

As far as figuring monthly payments, usually if you do a rent-to-own, you charge fair market lease payments for the home in your area (I would check and see what other homes that are comparable to this in your area are renting for) and in the contract, specify what percentage of those payments go towards payment on the house if the renter decides to later purchase. The amount you agree to deduct from a final purchase per month is strictly up to you and negotiable. If you do a land contract, the purchase price of the house is calculated and monthly payments are calculated based on a regular amortization schedule for paying off the purchase price, often adding in an amount to cover insurance and tax payments as well.

Note: This is general information and not to be construed as legal advice unless I have a signed retainer agreement with you.