Real Estate has always been considered a great investment. Over the years, real estate has made millionaires out of the masses. Over the past couple of years the real estate market has been a phenomena, as it has proved owning the right piece of real estate can yield a large profit without even swinging a hammer. But as this market begins to cool, many are reminded of the great financial crisis of 2008 that forced many real estate investors to determine the true meaning of an asset. An asset is described as something that makes its owner money, rental homes for example prove to be assets in all markets, while primary residences cost homeowners money no matter what. Many savy investors have figured out that buying real estate to rent out over the long term is the most successful strategy to building a portfolio of assets. Unfortunately, there are cases where even the most profitable real estate assets can cost the seller money.
Tenants make or break a landlord’s experience in the rental business. Tenants that pay on time and maintain the property as their own, are worth their weight in gold. Renters that do not take care of the property will leave landlords with loads of repairs and needing a near complete renovation once they vacate. Owning rentals can be a lucrative endeavor, but this is determined by the quality of a landlord’s tenants. In addition to poor maintenance of the property, some tenants neglect to pay their rent on time, putting landlords in a difficult position, especially if they have a mortgage on the property. As the Covid-19 Pandemic unfolded upon the United States, landlords were met with eviction bans from the government; meaning they could no long evict tenants that refused to pay their rent. Fortunately, these restrictions have since been lifted, but for nearly two years they put landlords and those who depend on their rental income in a tight position. Renters play an integral role in owning rentals as they determine how the relationship and overall experience as a landlord will go.
The allure behind owning rentals properties is obvious, but flipping homes and making a large check is another lucrative practice in real estate. Instead allowing someone to pay monthly to undergo wear and tear on your property, flipping homes guarantee the home is sold for its max value. Over time, landlords have discovered a way to capitalize on both rental and flip properties through the practice of lease to own purchases. Lease to own purchases function as its the name implies, tenants will rent the property over time, and pay more to do so as a portion of their rents go towards the purchase of the home. These leases are usually for a set amount of time until the tenant plans to get a loan from a bank to fully purchase the property. Homeowners have realized through lease to own, they not only make the monthly rent, they sell the property for its max value over time. Typically, tenants purchasing a property will take better care of it than those who are simply renting. From a landlord’s perspective, leasing to own properties seem as a no brainer, but just as there are problem renters, there are some lease to own tenants that act the same.
Buyers looking to undergo a rent to own agreement typically do so because they have no other options. This usually means the bank would not loan them the full amount to purchase a property, so taking on a lease to own situation is a bit risky from the get go. Many of these tenants end up leasing the place without structuring themselves financially to qualify for a mortgage with the bank. As a result, many homeowners leasing to own their properties end up doing so for far longer than they had anticipated; in many cases the tenants may never qualify for a mortgage unless the homeowner wants to take a 30 year ride with their tenant. Hoping to capitalize on profit and help a struggling homebuyer in the process is rewarding and seems to be a win-win for both parties, however, this practice oftentimes ends up costing the homeowner in the process.
Oftentimes these lease to own situations conclude negatively when the tenant is unable to hold up their end of the lease to own purchase agreement. From the beginning of these situations, landlords usually turn over a turn key home to the tenant, inevitably this home will undergo wear and tear as the buyer occupies the premises. If the tenant ends up taking longer or is not able to purchase the home after some time of renting, it will likely need repairs as the wear and tear reduces the value the once associated with the home. Real estate markets come and go, so anyone choosing to lease to own a property at the height of the market are taking a larger risk, as a tenant failing to complete the lease to own purchase will likely turn over a home in need of minor repairs at a time when homes are not worth near as much. Lease to Own Purchase agreements seem too good to be true, because they typically are. Often times, lease to own purchases do not end the way both parties anticipated and landlords end up taking most of the losses associated with the property.
If you personally underwent a lease to purchase agreement with a tenant that cannot perform in Greensboro, North Carolina, there is a solution. Helpful Homes is a locally owned and operated business with an owner who owns many rentals and specializes in solving problem properties for homeowners. Owning a lease to Own home in Greensboro who’s agreement is not being honored by the tenant can be hastle to deal with. In addition to evicting their tenant, they have the deal with the condition of the property. Fortunately, Helpful Homes purchases all their properties “as is” for cash. Unlike a typical real estate sale on the open market, homes do not have to meet the same standards from the bank or pass an appraisal. For many that jump into lease to own properties, these seemingly assets quickly become liabilities as the agreement does not operate as anticipated. Instead of holding on to these liabilities and giving tenants time that will never get it together, sell them to a company that understands the need for simple transaction, sell to Helpful Homes.