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Protect Profits With A Rent To Own Strategy

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The Holistic Survival ShowIt’s no secret that we’ve been in the business of suggesting that Holistic Survival readers consider switching their investing allegiance from the stock market to real estate. Simply put, the stock market is controlled by Big Time Operators and the frenzied daily twitches and spasms of speculative trading junkies. This is not your father’s stock market and not to be trifled with using money you need to survive. So what do you do to increase your net worth?

Real estate is a great choice, especially the strategy of income producing properties (landlord/tenant arrangements), but lately we’ve been paying attention to the specialized and potentially more profitable method of entering into rent to own agreements on properties you control. In some ways, this works the same way as a straightforward rental contract – you receive monthly payments – but there are a few big differences which work in your favor.

Down Payment
Since rent to own agreements come with the expectation that the property will be purchased by the tenant at some point in the future, a down payment of 5 -10% of the agreed purchase price, which is nonrefundable, is paid to the seller at the time the contract is signed. Even if the tenant eventually decides not to buy the property, you keep the down payment. Even better, if the rent to own agreement falls through because the buyer cannot find financing, you can go right back out into the market and put together another rent to own contract on the same property and receive another down payment in the process – all this while still continuing to collect rent from the present tenant.

Absentee Landlord
With a rent to own agreement, you actually get to be an absentee landlord, and for very good reason. In theory, the tenant is preparing to buy the property in the future and, as such, is expected to maintain and repair the place as needed at their own expense. What’s more, this owner-in-waiting has the added motivation of pride in something he will one day own to inspire him to not only take care of the property but perhaps even make improvements.

Did we mention you’re still collecting monthly rent checks? ‘Nuff said.

The Holistic Survival Team

HolisticSurvival.com

Flickr / jm3

 

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