Lease Options - How to get more in rent

Market rent is what it is and you can’t change that as a home seller, lease option investor or real estate agent. You have a small amount of wiggle room but if you are asking too much in rent on your rent to own home it won’t rent. I can’t tell you how many real estate agents I talk to about doing a rent to own just assume the mortgage payment of the seller should be the asking price for rent.

Unfortunately in some markets the market rent just won’t be enough to cover a high mortgage payment. The seller has to understand that if their entire payment is more than the rent they will have to cover the difference.

So what can you do if the seller can’t afford to cover that difference each month? Are your rent to own sellers out of luck? Not necessarily. Here’s an idea to get buyers to pay more in monthly rent, which will work if your seller has equity in their home. When you are advertising the home, advertise for market rent. Once you find a buyer that wants the home ask them, “Would you like to earn 50% on your money?”

They’ll probably say, “Yes!” or “What do you mean?”

I would respond by saying, “If you pay $200 more in rent each month, meaning $1,400 instead of $1,200, the sellers will give you that $200 each month as an option credit on this home, plus an additional $100 option credit. This would give you a 50% return on your money and help you buy this home much more quickly by building up option credits. Would this work for you?”

This gives your seller an extra $200 per month to cover the mortgage payment, but they will credit it back to the rent to own buyer at closing. If the buyer doesn’t purchase the home, the seller keeps the extra money.