Investing in Real Estate can have its pros and cons. One of the largest complaints from investors is about tenants, specifically tenants calling you with issues at the worst possible time. One way to beat this issue is to invest into a Rent to Own. some benefits of a Rent to own are
1. minimal to zero property management hassles
2. Tenant has skin in the game. (Tenant provides a down payment)
3. pre determined exit strategy ( you know the profit and timeline before you begin)
4. Win Win situation for everyone involved.
5. Large monthly cashflow ($500-$1000/ month)
6 High Return on investment ( 2 year 25-50% return)
There are three ways you can purchase a Rent to own.
1. Tenant First Rent to Own. - This is where you find the tenant and qualify the tenant first. You would pre qualify the tenant and once you feel comfortable with your tenant your real estate agent would take the tenant shopping for their new home. Personally I feel this is usually the most successful form of Rent to Own. The tenant has chosen the home, and did not have to settle for a property.
2. Traditional Rent to Own. - This is where you already own the home and then look for and qualify a tenant. The tenant does not have choice of properties however it is possible to have a larger Profit with this for of Rent to Own.
3. Sandwich Lease - this is a great way to purchase with little or no money down. It is definitely the hardest of the three strategies but your return on investment can be infinite.
A sandwich lease works by finding a motivated seller who would be interested in leasing the home to you with the option to purchase. Once you secure this option, you would in turn sublease the property to a tenant with the option to purchase at a higher price. The difference in price and monthly rent would be your profit.
If you are interested in learning more about this fantastic way to invest in Real Estate in the London Ontario market, please feel free to contact me. I specialize in helping investors in London Ontario