If you’re considering investing in Florida real estate, could rent-to-own address some of the current market challenges?
Despite Florida’s ongoing appeal, the market has issues that make rent-to-own a viable option worth exploring. Even though Florida’s population has had fast growth, the buyers market hasn’t been as competitive. Changes in home prices, interest rates, and insurance are causing prospective buyers to wait for better conditions, making rent-to-own an option for them. This is great news for investors!
To determine if rent-to-own is the right investment choice for you, you have to understand the current market conditions and when they’ll align with your investment goals.
Look at the area’s housing demand and number of potential buyers who are not yet ready to purchase as factors. Looking at popular areas with a slower housing market due to conditions is a good place to start.
Florida’s current market conditions would allow investors to secure tenants that want the option to buy the home that they are renting. Being a rent-to-own investor allows for long term tenants, which ensures steady income flow since there would be less income loss from vacancies. These types of leases often allow for tenants to take on greater upkeep responsibilities as well.
In a typical rent-to-own agreement, a buyer rents the property for a set period, usually up to five years, with an option to purchase it at a predetermined price. During the rental period, a portion of each monthly payment is often credited toward the down payment. Some agreements require the tenant to buy the home, while others offer it as an option. You can also set the agreement to adjust the sales price based on the market value at the end of the term.
Rent-to-own is a great option to consider as an investor as it generates a steady income for you while guaranteeing that you sell at a profit.