Some of the BIG differences with "Rent To Own" or "Lease To Own" versus a standard "Rental" type arrangement are as follows;
1. Large up-front initial deposit. Unlike a "Renter", you are not governed by legislation with respect to how much you can collect. The deposits I receive vary from $5k to as much as $50k down. When I receive a $10k deposit there are 10,000 reasons why a Tenant/Buyer is less likely to wreck my property, or just walk away from the agreement. If they do, they forfeit their down payment. I like to refer to the Initial Down Payment as my Tenant having "Skin in the Game". The MORE Skin in the Game they have, the BETTER!
2. The income I can generate from a Lease To Own arrangement is "substantially" higher than what I can generate from a standard "rental" type situation. They are willing to pay a higher amount, as they are NOT "renting", they are in the process of "BUYING" the property. There is a BIG difference here.
3. Unlike a standard "renter", my Tenant/Buyers fix, repair and maintain the property for me. They will even improve the value of the property for me by performing "major" renovations. There are not too many "Renters" that will do that for you, are there?
Remember, you need to increase your CASH FLOW if you want to "Enjoy the Journey". By incorporating a "Lease To Own" program in parallel with your "Long Term Buy & Hold" investing strategy, you will definitely achieve both objectives!
I hope that you find this information of assistance to you? If you would like more information, please do not hesitate to contact me.
QUOTE (JoefromTO @ Sep 14 2009, 12:04 PM) Iv`e heard/read about the Rent to Own strategy a few times. Recently, on one of my other threads, there has been a long discussion about the difference between Ontario and other provinces and the fairness to Landlords issues, etc.
It seems logical, although I could be mistaken, that a Rent to Own strategy would almost completly remove all of the potential tenant issues with a buy and hold strategy.
I`d like the opinion of others what they would consider to be the pros and cons of each? The responses could also be just general comments regarding the differences between both.