Hello,
I have a tenant who is interested in the Rent-to-Own transaction. I have read the postings regarding Rent-to-Own, listened to Mark Loeffler presentation, and worked on some spreadsheets.
I have put together a very general presentation for my tenant (transcribed below). In this process I have discovered that Rent-to-own is a good strategy for selling a property, getting money to buy houses, and I think an easier way to attract JV partners. However, I still have some questions regarding this strategy such as: Do I increase the rent on a annual basis? How to calculate the portion for the rent/ monthly credits? How the Tenant and Landlord Board see the Lease/ Option Agreement?
I have read postings from Rent-to-Own experts: Mark Loeffler (Ontario), RedLine (Calgary), Tony Peters (Calgary), Dan Eisenhauer (BC), Joey D. Ragona (Ontario). I am in Edmonton. I would like to talk to somebody "in person". I own three townhouses in the same complex, in NW Edmonton, and according to the price range that Mark told for the bread and butter Rent-to-own (between $180K and $220K), my townhouses will be perfect.
Please, if you have done at least 5 Rent-to-Own transactions, have easy access to Edmonton, and is willing to have lunch, dinner, or coffee, send me a Private Message. If one of the Rent-to-Own experts are coming to Edmonton and are willing to meet for 1 hour, please let me know. I would be honoured to meet you. I know that this is a busy season. We might meet after the January REIN meeting in Calgary for dinner. I would like to have the appointment booked now and know that things are moving.
Presentation:
Rent-to-Own
This document contains basic information regarding Rent-to-Own transaction to be presented to XXXXXXXXXXX. Any piece of information might be added, changed, or deleted without notice.
The main purpose of this document is to provide general information about the Rent-to-Own transaction. This is not an Agreement, and it does not hold XXXXXXXXXXX committed to any transaction or liable for any explanation in this presentation.
Definition: Rent -to-Own is a transaction that gives opportunity to the tenant to buy a house at the end of the Lease/ Option Agreement.
span>Main Purpose: During the Term of the Lease/ Option Agreement, the tenant is responsible to improve their credit, establish a credit rate acceptable to have a mortgage, build the necessary down payment to purchase the home at the end of their lease term, and pay the monthly rent. With the Lease/Option Agreement, the owners are obligated to sell to the tenant, but the tenant is not obligated to buy.
Qualifications: The Tenant/ Buyer need to qualify for the Rent-to-Own program. The qualification depends on your Financial and Credit situation.
A mortgage broker must be consulted to check credit history, credit score, income, and your affordability among other things.
Tenant Responsibilities:
· Look for independent legal advice
· Provide a % of the down payment of the purchase price called "Deposit". The more you give for Deposit, the better. It will make your down payment larger or it can decrease your monthly credits. The Deposit also shows your commitment with the deal. The Deposit is non-refundable if you give up.
· Part of the rent is applied towards the down payment (Monthly Credits)
· House Maintenance, Repairs and Upgrades (including appliances)
· Utilities and Services (condo fees, electricity, water, sewer service, cable TV, parking, telephone, etc)
· Proper owner Insurance (present proof)????
· Payment on time of the Rent. Default represents a termination of the Agreement. Once in Default the Monthly Credits Accumulated, the Initial Deposit, and any Additional Option Deposits shall be forfeited as liquidated damages and not penalties.an>· Legal fees:????
· Obtain adequate financing at the time of the purchase
· Must have by the end of the term at least 5% of the property value to get a mortgage with CMHC
· Start the process of getting financing at least 6 months prior to the Expiration of the Lease Agreement
· If you are not eligible to get financing at the Expiration of the Lease Agreement and is on time with your payments, there is a possibility of a new lease agreement and honour the accumulated Option Credits to a new agreement.
Landlord Responsibilities:
· Ensure that the Tenant improves the credit
· Present you with all the required Legal Agreements
· Pay Property Tax
· Pay Homeowner Insurance????
· Maintain control that you are paying on time your obligations regarding condo fees, utilities, etc.
· Have a direct and open relationship with you regarding your savings plan to buy the property by the end of the Lease Agreement
Terms:
Usually 2 or 3 yearsizec-->
Agreements:
· Intent to Lease
· Residential Lease with Option to Purchase
· Option to Purchase (Schedule A)
· Terms of the Lease with Option to Purchase & Disclosures (Schedule B)
Utilities Agreement (Schedule C)
Thanks,
I have a tenant who is interested in the Rent-to-Own transaction. I have read the postings regarding Rent-to-Own, listened to Mark Loeffler presentation, and worked on some spreadsheets.
I have put together a very general presentation for my tenant (transcribed below). In this process I have discovered that Rent-to-own is a good strategy for selling a property, getting money to buy houses, and I think an easier way to attract JV partners. However, I still have some questions regarding this strategy such as: Do I increase the rent on a annual basis? How to calculate the portion for the rent/ monthly credits? How the Tenant and Landlord Board see the Lease/ Option Agreement?
I have read postings from Rent-to-Own experts: Mark Loeffler (Ontario), RedLine (Calgary), Tony Peters (Calgary), Dan Eisenhauer (BC), Joey D. Ragona (Ontario). I am in Edmonton. I would like to talk to somebody "in person". I own three townhouses in the same complex, in NW Edmonton, and according to the price range that Mark told for the bread and butter Rent-to-own (between $180K and $220K), my townhouses will be perfect.
Please, if you have done at least 5 Rent-to-Own transactions, have easy access to Edmonton, and is willing to have lunch, dinner, or coffee, send me a Private Message. If one of the Rent-to-Own experts are coming to Edmonton and are willing to meet for 1 hour, please let me know. I would be honoured to meet you. I know that this is a busy season. We might meet after the January REIN meeting in Calgary for dinner. I would like to have the appointment booked now and know that things are moving.
Presentation:
Rent-to-Own
This document contains basic information regarding Rent-to-Own transaction to be presented to XXXXXXXXXXX. Any piece of information might be added, changed, or deleted without notice.
The main purpose of this document is to provide general information about the Rent-to-Own transaction. This is not an Agreement, and it does not hold XXXXXXXXXXX committed to any transaction or liable for any explanation in this presentation.
Definition: Rent -to-Own is a transaction that gives opportunity to the tenant to buy a house at the end of the Lease/ Option Agreement.
span>Main Purpose: During the Term of the Lease/ Option Agreement, the tenant is responsible to improve their credit, establish a credit rate acceptable to have a mortgage, build the necessary down payment to purchase the home at the end of their lease term, and pay the monthly rent. With the Lease/Option Agreement, the owners are obligated to sell to the tenant, but the tenant is not obligated to buy.
Qualifications: The Tenant/ Buyer need to qualify for the Rent-to-Own program. The qualification depends on your Financial and Credit situation.
A mortgage broker must be consulted to check credit history, credit score, income, and your affordability among other things.
Tenant Responsibilities:
· Look for independent legal advice
· Provide a % of the down payment of the purchase price called "Deposit". The more you give for Deposit, the better. It will make your down payment larger or it can decrease your monthly credits. The Deposit also shows your commitment with the deal. The Deposit is non-refundable if you give up.
· Part of the rent is applied towards the down payment (Monthly Credits)
· House Maintenance, Repairs and Upgrades (including appliances)
· Utilities and Services (condo fees, electricity, water, sewer service, cable TV, parking, telephone, etc)
· Proper owner Insurance (present proof)????
· Payment on time of the Rent. Default represents a termination of the Agreement. Once in Default the Monthly Credits Accumulated, the Initial Deposit, and any Additional Option Deposits shall be forfeited as liquidated damages and not penalties.an>· Legal fees:????
· Obtain adequate financing at the time of the purchase
· Must have by the end of the term at least 5% of the property value to get a mortgage with CMHC
· Start the process of getting financing at least 6 months prior to the Expiration of the Lease Agreement
· If you are not eligible to get financing at the Expiration of the Lease Agreement and is on time with your payments, there is a possibility of a new lease agreement and honour the accumulated Option Credits to a new agreement.
Landlord Responsibilities:
· Ensure that the Tenant improves the credit
· Present you with all the required Legal Agreements
· Pay Property Tax
· Pay Homeowner Insurance????
· Maintain control that you are paying on time your obligations regarding condo fees, utilities, etc.
· Have a direct and open relationship with you regarding your savings plan to buy the property by the end of the Lease Agreement
Terms:
Usually 2 or 3 yearsizec-->
Agreements:
· Intent to Lease
· Residential Lease with Option to Purchase
· Option to Purchase (Schedule A)
· Terms of the Lease with Option to Purchase & Disclosures (Schedule B)
Utilities Agreement (Schedule C)
Thanks,