I own a mobile home park in Minnesota and occasionally I have older homes the park acquired that I list “for sale or rent.” The price is usually $8,000 - $10,000 to purchase and I always get the same message from potential customers “do you do rent to own?”
I know we shouldn’t do rent to own and instead should do a rent credit system.
But I don’t see the real benefit of a rent to own or rent credit system for older used homes the cash program won’t finance. I can rent the home for $400 on top of lot rent and make around $4,000 a year, (yes I pay for repairs) and have a $10,000 dollar home at the end of it. Or I can rent credit the home and the $400 goes to “pay off the home”. I still pay for repairs, and 2.5 years later instead of having $10,000 in rent and a $10,000 home, I have $10,000 in rent or “payments” and give the home away for free.
The other problem is what if the roof needs replacement. Well if I’m renting the home I pay for it with rent proceeds, if I’m rent crediting the home I pay for it, and if the rent credit is over and they own the home the roof leaks until the home is junk and they run off because they don’t have the couple thousand to replace it. Now I have tear down cost and an empty lot.
When people ask if I do rent to own I say no but I will take payments on top of rent until you pay it off. That doesn’t sound so good to them. They want to “rent” a home, at the market rate, and have there rent be treated like a mortgage payment with no interest, all principal.
I can’t get past the feeling I am giving homes away that have decent value. I must not be looking at this the right way.