If you’re thinking of owning a rent-to-own investment property then you should definitely be thinking about a contract. That’s an absolute must! Here’s why rent to own contracts can be great for investors in NY.
Real estate is a major investment, and, every investment needs to have a contract. You should never enter into an investment without a contract! And, the more complicated the situation, the more a contract will benefit you.
Why rent to own contracts can be great for investors in NY
#1. Outlines Terms
Just imagine: if you have tenants and they’re supposed to pay $1000 a month but then they decide to only pay $200 a month. What about the rest of the money? If you don’t have a contract, it can be hard to prove that they were supposed to pay the higher amount, and it can be more difficult to apply pressure to get them to pay.
Or, if you don’t have contract, how much do they own to purchase the house? However, if you do have a contract, it makes it clear to both parties what the terms are so there are no questions.
#2. Outlines Responsibility
A rent to own contract outlines the responsibility of the tenant and of the owner. Who should shovel the driveway? Who pays property taxes? Who should replace a broken furnace? What if the furnace breaks down one day before the tenant buys the house?
A contract will outline these responsibilities in detail so that there are no questions about who needs to do what.
#3. Provides Protection
A contract protects both parties by clearly outlining who is responsible for what, and when. From payment to upkeep, from taxes to liability, everything should be written out clearly in the contract to protect both parties.
Moreover, a contract provides you as the owner in case the tenant decides not to pay – the contract will make it clear that you continue to be the owner of the house.
#4. Easier To Sell
When it comes time to sell the property to your tenant, a contract makes it easier for the sale to be completed. But there’s another consideration, too: what if you want to sell the entire property and rent to own contract to another investor?
Let’s say that circumstances in your life change and you need to move on from the agreement. A contract (along with the house) can be sold to another investor.
If you are thinking about owning a rent to own property then you should definitely use a contract – it helps you clarify terms and responsibility, it provides protections, and it can even be sold.
These are 4 main reasons why rent to own contracts can be great for investors in NY